Oil rose to its lowest level in three weeks in CFDs Trading as investors bet yesterday’s decline made the commodity attractive amid a recovery in economic growth.
Crude gained as much as 0.8 percent in New York, reversing earlier losses, before a report today that may show U.S. employers added jobs for a third month.
Economists raised forecasts for U.S. jobs growth this week, with the median estimate calling for a gain of 150,000 in December and a drop in the unemployment rate to 9.7 percent.
The February contract climbed as much as 69 cents to $89.07 a barrel in electronic trading on the New York Mercantile Exchange, and was at $88.88 at 11:09 a.m. Singapore time. Yesterday, it declined $1.92, or 2.1 percent, to $88.38, the lowest settlement since Dec. 17. Oil has dropped 2.6 percent this week.
Crude slumped yesterday as the dollar gained against the euro on increasing sentiment that the U.S. economy is improving. The greenback reached the strongest level against the European currency since Sept. 15.
A report on Jan. 5 from ADP Employer Services showed companies boosted payrolls in December by the most since records began in 2001. Employment jumped by 297,000, almost three times the 100,000 median estimate of economists surveyed.
Brent crude oil for February settlement was at $94.10, down 42 cents, on the London-based ICE Futures Europe exchange. Yesterday, it fell 98 cents, or 1 percent, to $94.52.
Brent’s premium to West Texas oil futures traded in New York climbed to $6.14 a barrel yesterday, the most since Feb. 13, 2009, according to data compiled by Bloomberg. This spread narrowed to $5.22 today.
Traders are selling Brent contracts and buying West Texas futures on expectation that the premium will narrow. The average price difference between the crude grades over the past two years is 76 cents a barrel.