Oil boosted after robust jobs data, trims weekly loss

Oil futures rose Friday, extending early gains after a much stronger-than-expected U.S. jobs report for October, but remain on track for a weekly loss.

West Texas Intermediate crude for December delivery CLZ19, +2.03%  rose $1.01, or 1.9%, to $55.19 a barrel, while January Brent crude BRNF20, +1.83%, the global benchmark, gained $1.17, or 2%, to trade at $60.79 a barrel.

The Labor Department said the U.S. economy created 128,000 new jobs in October, above economist’s estimates of a 75,000 gain, while the unemployment rate ticked higher to 3.6%, in line with expectations. The government also revised up the number of jobs created in August and September by a total of 95,000.

Analysts attributed earlier strength in part to data Friday showing a rise in the Caixin China manufacturing purchasing managers index to a 32-month high of 51.7 last month from 51.4 in September. That’s in contrast to China’s official manufacturing PMI released on Thursday, which fell to an eight-month low of 49.3 in October.

For the week, WTI is on track for a 2.7% fall, with Brent set for a 2.1% pullback. Supply concerns were expected to continue to keep a lid on upside, with Reuters reporting that its survey found output by members of the Organization of the Petroleum Exporting Countries recovered in October from an eight-year low. The bounce was powered by a rapid recovery in production by Saudi Arabia following September attacks on its infrastructure.

Though the rebound “did not come as a surprise, given that Saudi Arabia was able to normalize its production again following the September outages, it nonetheless puts OPEC’s output approximately 1.4 million barrels per day above the IEA’s estimate of the call on OPEC for the first half of 2020, which highlights the need for production to be cut further,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.