Oil settles above $81 on US jobs report

[March 06, 2010]  WASHINGTON (AP) -- The government jobs report for February that came out Friday raised hopes that the economy may slowly be healing. It also raised oil and wholesale gasoline prices closer to their highs for the year.

Investors see a link between the unemployment report, which showed the jobless rate holding steady at 9.7 percent, and higher gasoline prices, according to Jim Ritterbusch of Ritterbusch and Associates.

"People expect gasoline demand improvement as we proceed through the year," he said, even though supplies remain ample and demand so far has continued to be weak.

Oil prices also got a boost on Friday from China Premier Wen Jiabao, who said his country is on track for 8 percent growth this year. China is the second biggest consumer of oil in the world after the U.S.

Benchmark crude for April delivery rose $1.29 to settle at $81.50 a barrel on the New York Mercantile Exchange. The 2010 high for oil was $83.95 on Jan. 11, about the same time that retail gasoline prices reached a high for the year of $2.7583 per gallon.

Crude has bumped around the $80 mark time and again over the past few months, only to be pushed back on conflicting signals about the recovery from the Great Recession.

Retail gasoline prices rose 1.4 cents overnight to a national average of $2.72 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Price are 3.83 cents shy of the high for the year.

Many analysts forecast prices will top $3 per gallon this spring.

Prices have jumped 6.6 cents in the past month and remain 78.7 cents higher than prices of a year ago.

In other Nymex trading in April contracts, heating oil rose 2.87 cents to settle at $2.0974 a gallon, and gasoline gained 3.73 cents to settle at $2.2710 a gallon. Natural gas added 1.8 cents to settle at $4.593 per 1,000 cubic feet.

In London, Brent crude rose $1.35 to settle at $79.89 on the ICE futures exchange.

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Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.

[Associated Press; By MARK WILLIAMS]

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