Crude Oil Ends Higher After Jobs Data; Gains 7.2% For Week

(RTTNews) - U.S. crude oil continued to extend gains to settle sharply higher Friday, after some better-than-expected U.S. jobs report strengthened the case for a U.S. interest rate hike by mid-year, despite the dollar spiking significantly.

For the week, oil prices gained 7.2 percent.

Oil prices were also supported by increased violence in Libya and a higher economic growth forecast for the struggling eurozone.

In some upbeat economic news, employment in the U.S. rose more than anticipated in January, a Labor Department report showed Friday. The report also showed an unexpected uptick in the unemployment rate that edged up to 5.7 percent in January from 5.6 percent in December.

The Fed has been hinting that interest rates will rise in June despite stubborn low inflation. Today's jobs report could mean that an April rate hike is instead in the cards if consumer prices pick up. Full-time employment surged, and jobs gains from the previous two months were revised higher.

Massive layoffs in the U.S. energy sector have raised speculation that OPEC is winning its price war with non-OPEC suppliers who are trimming costs and abandoning projects.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, jumped $1.21 or 2.4 percent to settle at $51.69 a barrel on the New York Mercantile Exchange Friday.

Crude prices for March delivery scaled a high of $53.16 a barrel intraday and a low of $50.72.

On Thursday, crude oil surged to end at $50.48 a barrel, up $2.03 or 4.2 percent, after a better than expected initial claims data for unemployment benefits in the U.S. and on hopes that demand for oil would pick up with the European Commission's optimistic take on the eurozone economy.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.75 on Friday, up from its previous close of 93.59 late Thursday in North American trade. The dollar scaled a high of 94.76 intraday and a low of 93.52.

The euro trended lower against the dollar at $1.1315 on Friday, as compared to its previous close of $1.1477 late Thursday in North American trade. The euro scaled a high of $1.1487 intraday and a low of $1.1312.

In economic news from the U.S., employment in the U.S. increased more than anticipated in January, with the Labor Department indicating non-farm payroll employment to have risen by 257,000 jobs in January compared to economist estimates for an increase about 230,000 jobs. Nonetheless, the report also showed that the unemployment rate edged up to 5.7 percent in January from 5.6 percent in December.

The unemployment rate had been expected to remain unchanged from the previous month, when it was at its lowest level since a matching rate in June of 2008. Revised data also showed that employment in November and December jumped by 423,000 jobs and 329,000 jobs, respectively, reflecting a net upward revision of 147,000.

From the eurozone, Germany's industrial production expanded for the fourth consecutive month in December, but the growth rate weakened, defying expectations for a faster expansion, as mild weather dampened construction activity. German industrial output edged up 0.1 percent in December from a month ago, Destatis said Friday. Production was forecast to rise 0.4 percent after expanding by a revised 0.1 percent in November.

The French trade deficit increased more than expected in December due to an increase in imports, the customs office reported Friday. The trade gap widened to EUR 3.44 billion in December from EUR 3.09 billion in November. The deficit was forecast to rise to EUR 3.3 billion.

The U.K. trade deficit widened to the highest in four years in 2014 as exports declined sharply than imports, official data revealed Friday. The visible trade gap rose to GBP 10.2 billion in December from GBP 9.28 billion in November. Economists expected a GBP 9.1 billion deficit.

Standard & Poor's downgraded the long-term rating of Greece to B-minus from B, while placing the beleaguered country on CreditWatch negative. This means Greece could once again be downgraded in the near future.