Oil touches $70 after jobs report
Crude prices hold near a 7-month high after a better than expected labor market report from the government.
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LONDON (Reuters) -- Oil rose Friday, hovering around $70 a barrel, after a better-than-expected report on the U.S. labor market.
Government data showed the U.S. economy shed 345,000 jobs in May, below the 520,000 expected by economists and the revised 504,000 jobs lost in April. The jobless rate rose to 9.4%.
U.S. crude for July delivery was up 89 cents at $69.70 per barrel after peaking at $70.32. Oil has not topped $70 a barrel since early November.
On Thursday, U.S. crude futures gained 4% on hints of a recovery in oil demand following data showing the number of U.S. workers filing new claims for jobless benefits fell for a third straight week.
"For the time being, U.S. macro data seems to be what is driving crude prices, and not the fundamentals, which look uninspiring at best," said MF Global in its daily energy report.
"How long this disconnect will continue is anyone's guess, but for now, it is inadvisable to stand in the way of what seems to be investor money clearly piling into commodities.
"Buyers are hoping that an imminent global economic recovery, coupled with continued weakness in the dollar, will eventually improve the currently weak fundamentals."
Oil prices have risen sharply from lows near $30 a barrel this winter but are still less than half their record peak last July at over $147 as recession has bitten deep into oil demand.
U.S. investment bank Goldman Sachs (GS, Fortune 500) said Thursday a potential economic rebound alongside production cuts by the OPEC cartel could propel crude to $85 a barrel by the end of the year and to $95 a barrel by the end of 2010.
This view is shared broadly by the head of the Organization of the Petroleum Exporting Countries Oil producing group, who told Reuters Energy Summit this week that prices could reach $80-$90 per barrel by early next year.
Rising stock markets are supporting expectations that the global economy may begin to recover sooner rather than later.
Japan's Nikkei stock average rose 1% on Friday to an eight-month closing high, lifted by resource and energy shares amid a climb in commodity prices.
European shares rose in early trade Friday, buoyed by mining and oil companies. 
