To achieve strong U.S. economy and tight supplies of heating oil this winter, crude oil futures went back above $95 a barrel Friday.
The Labor Department reported that employers boosted payrolls by 166,000 jobs in October, the biggest increase in months and double what economists had forecast. Meanwhile, October's unemployment rate held steady at 4.7 percent. Separately, the Commerce Department said factory orders rose 0.2 percent in September, better than the 0.4 percent decline analysts were expecting.
"It suggests that concerns about the economy ... are overblown a little bit," said Michael Lynch, president of Strategic Energy and Economic Research Inc., in Winchester, Massachusetts.
Refinery problems also contributed to Friday's gains. Operations at a 172,000 barrel-per-day Petroplus Holdings AG refinery in England are expected to be limited for a month due to a fire earlier this week. And Chevron Corp. said Friday its 330,000 barrel-per-day refinery in Pascagoula, Mississippi, will run at reduced rates until early next year due to an August fire.
Light, sweet crude for December delivery rose $1.65 to $95.14 a barrel on the New York Mercantile Exchange after rising as high as $95.63 earlier. On Thursday, oil prices retreated from an early record above $96 to close down more than $1, in part because of dismal reports on consumer spending and industrial activity that also factored into the Dow Industrial's 362-point decline.
December gasoline rose 7.68 cents to $2.42 a gallon on the Nymex, and December heating oil rose 4.94 cents to $2.5617 a gallon.
Oil prices were also boosted by news that Secretary of State Condoleezza Rice has told Turkish officials the U.S. views Kurdish rebels based in northern Iraq as a "common threat" that the United States would help fight. Investors have sent oil prices sharply higher in recent weeks in part on concerns that a Turkish incursion into Iraq in search of Kurdish rebels would cut oil supplies from Northern Iraq.
An American push for harsher U.N. sanctions against Iran for its nuclear program on Friday also supported prices.
Additionally, investors already concerned about falling oil supplies and imports received word that Hurricane Noel may have disrupted some oil shipments this week. And analysts said OPEC production increases that began Thursday have been hampered by maintenance at some Middle Eastern oil fields.
The confluence of headlines fueled fears that there will be fourth quarter shortages of oil and other petroleum products.
"I think people ... are worried about the fourth quarter (supply and demand) balance," Lynch said.
"We've got some colder weather finally coming into the Northeast," Andrew Lebow, senior vice president at MF Global Inc. in New York.
Meanwhile, the dollar dipped to a new record low against the euro on Friday. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
"The major trend of weak dollar and strong oil prices continues," Lebow said.
Also on the Nymex Friday, December natural gas fell 16.2 cents to $8.475 per 1,000 cubic feet as investors sold to lock in profits from Thursday's 30.7-cent rally.
In London, December Brent crude rose $1.80 to $91.52 a barrel on the ICE Futures exchange.
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