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The Canadian Press - ONLINE EDITION
Oil turns higher as economic worries spur hope of action by Federal Reserve
NEW YORK, N.Y. - The price of oil finished higher Friday as concerns about a disappointing U.S. employment report gave way to the likelihood of action by the Federal Reserve.
Benchmark crude rose 89 cents to finish at $96.42 per barrel, after an initial negative reaction to the morning's jobs report. The price dropped nearly $2 in the first hour of trading on the New York Mercantile Exchange after the government reported that the economy added a weaker-than-expected 96,000 jobs last month.
Hiring hasn't been strong enough to jump-start the economic recovery. And that means demand for energy, including gasoline for commuting to work, remains constrained. Gasoline demand rose less than 1 per cent in the four weeks ended Aug. 31 compared with same period a year ago, the government said Thursday.
But the weak jobs report increases the likelihood that the Federal Reserve will unveil a new bond-buying program designed to lower long-term interest rates. The expectations of economy-boosting measures, not only in the U.S. but in China and Europe, have supported oil prices for the past few weeks. China and the European Central Bank announced new programs Thursday. The Fed conducts a policy meeting next week.
The push and pull between economic weakness and stimulus expectations has kept oil in a range of $94 to $97 for three weeks.
"Oil has hit a sweet spot — it can't get too hot and it can't get too cold," said Phil Flynn of Price Futures Group.
A report out Friday suggests the price may still be too hot for the Obama administration however. While the White House has been considering tapping the Strategic Petroleum Reserve for weeks, Reuters is reporting that it's mulling a release much larger than the 30 million barrels from last year in an effort to stem the higher cost of oil and gasoline.
Brent crude, which is used to price international varieties of oil, rose 76 cents to end at $114.25 on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
— Wholesale gasoline rose 3 cents to finish at $3.02 a gallon.
— Heating oil rose less than a penny to end at $3.15 a gallon.
— Natural gas lost 9 cents to finish at $2.68 per 1,000 cubic feet.
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'Shocking' half of First Nations kids living in poverty, new study finds
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