Oil holds slim gains
Government report on the labor market stokes demand concerns. But rising stocks and a weak dollar support prices.
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| Click chart here for other commodity prices |
NEW YORK (CNNMoney.com) -- Oil prices rose moderately Friday as traders largely overlooked a grim report on the labor market to focus on rising stock prices and a weaker dollar.
Light, sweet crude for December delivery rose a modest 27 cents to settle at $61.04 a barrel in New York. Oil had traded near $63 a barrel earlier in the session.
On Thursday, the contract fell $4.53 to settle at $60.77 a barrel, its lowest point since March 21, 2007, as concerns about weak demand weighed on the market.
A report from the U.S. Department of Labor Friday highlighted the economic challenges facing the world's largest consumer of oil.
The report showed the nation's economy lost 240,000 jobs in October and the unemployment rate jumped to 6.5%. So far this year, the economy has shed 1.2 million jobs.
But world stock prices rose despite the grim jdata.
The Dow Jones industrial average was up more than 2% with two hours left in the session, following a brutal two-day selloff. Major stock indexes in Europe rose about 2.5% while Asian markets were mixed.
Oil traders have been closely tracking world markets to gauge the severity of what many economists say is a looming global recession.
"The oil market is relieved that global equity markets didn't get completely destroyed by the poor jobs data," said Andrew Lebow, energy broker at MF Global in New York.
Still, Friday's report "is a foreshadowing of weak demand," Lebow said.
Dollar: In addition to a resilient stock market, the price of oil was bolstered by a weak U.S. dollar.
The dollar was down about 0.2% against the euro in New York trading after climbing against the 15-nation currency Thursday. The greenback was down 0.4% against the British pound.
Crude oil and other commodities are used as a hedge against dollar weakness and inflation. And a less robust buck makes oil, which is priced in dollars, a more attractive investment for overseas buyers.
Further to fall: While the oil market appeared to take Friday's jobs report in stride, investors remain wary about the prospect of ongoing economic weakness and falling demand.
"Declining oil demand has been one of the biggest negative factors in the last few days," said Tom Pawlicki, industry analyst at MF Global in Chicago.
Oil slid to session low of $59.97 earlier Friday, raising concerns that it could settle below the psychologically important $60-a-barrel level. If the price goes below this point, many analysts think it could fall as far as $50 a barrel in the near future.
The price of oil has fallen 58% since July's all-time high above $147 a barrel.
"Prices should make progress toward the $50 per barrel level, as there's not much near-term support to create any potential bounce," Pawlicki said.
Gas: Retail gasoline prices, meanwhile, fell for the 51st consecutive day.
The national average price for a gallon of regular gas decreased 2.6 cents to $2.314, according to a daily survey released Friday by motorist group AAA.
Gas prices have fallen nearly 44%, or $1.80, since hitting a record high price of $4.114 a gallon on July 17.
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