Covering The Economy

Aug 3, 2012 8:25 PM

Oil Surges 5 Percent On Strong Jobs Growth

NEW YORK (AP) - The price of oil posted its biggest gain in more than month, jumping nearly 5 percent, after the government reported a sharp rise in jobs growth for July.

Benchmark U.S. crude on Friday rose $4.27 to end the day at $91.40 per barrel in New York. Brent crude, which sets the price for oil imported into the U.S., climbed $3.04, or 2.9 percent, to $108.94 per barrel in London.

Prices climbed after the government said U.S. employers added 163,000 jobs in July. Last month's hiring was the best since February, though it wasn't enough to drive down the unemployment rate. Prices for oil and gasoline tend to rise on signs of strength in the economy, which increases energy demand.

"There's a lot of optimism following the jobs report," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. Also, the number of new jobs wasn't enough to dissuade investors that the U.S. Federal Reserve could take more action to spur growth, he said.

After rising sharply the first three weeks of July, the price of oil steadied as investors waited to see if central banks in the U.S. and Europe would announce new stimulus measures. On Friday, crude rose 4.9 percent, the biggest one-day increase since June 29, when it rose 9.4 percent.

Retail gasoline prices, meanwhile, rose 3.3 cents to a national average of $3.567 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gasoline prices have jumped by about 24 cents per gallon since the beginning of July.

In other futures trading, heating oil added 8.4 cents to finish at $2.926 per gallon while wholesale gasoline added 6.1 cents to finish at $2.931 per gallon. Natural gas was dropped 4.3 cents to finish at $2.877 per 1,000 cubic feet.

(Copyright 2012 The Associated Press. All rights reserved.)

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