Oil hovers near $73 as traders eye US jobs report

[July 02, 2010]  SINGAPORE (AP) -- Oil prices hovered near $73 a barrel Friday in Asia as investors look to the monthly U.S. jobs report for clues about the strength of global crude demand.

Benchmark crude for August delivery was up 15 cents to $73.10 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.

The contract dropped $2.68, or 3.5 percent, to settle at $72.95 on Thursday as a series of reports revealed more negative news about the U.S. economic recovery and heightened fears of a double-dip recession.

The government said jobless claims rose more than expected last week, construction spending declined in May and the number of buyers who signed contracts to purchase homes dropped in May to the lowest level on record dating from 2001.

Investors will be eyeing the June jobs report, scheduled to be released later Friday, which is expected to show that private employers added 112,000 jobs for the month while the unemployment rate is expected to rise to 9.8 percent from 9.7 percent in May.

"Oil prices remain under the wrath of macroeconomic pessimism," Barclays Capital said in a report "The market is engulfed in a sentiment which is seeking out to be bearish."

"We do expect the recovery to support prices ahead, once much of the doom and gloom mindset fades away, but a pervasive air of somewhat irrational nervousness still persists."

In other Nymex trading in July contracts, heating oil rose 0.60 cent to $1.9445 a gallon, gasoline added 0.24 cent to $2.000 a gallon and natural gas fell 1.4 cents to $4.840 per 1,000 cubic feet.

Brent crude was down 6 cents to $72.28 a barrel on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.