Oil price rises to near $94 after sharp drop
The price of oil rose to near $94 a barrel on Monday, rebounding after sharp losses last week that were due to concerns over abundant supplies and weak U.S. employment figures.
By early afternoon in Europe, benchmark oil for May delivery was up 97 cents to $93.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents on Friday and was down 5 percent from midweek.
The price of oil last week fell after a weak jobs report cast doubt on the strength of the U.S. economy. The Labor Department reported the economy added 88,000 jobs in March, the fewest in nine months. The slowdown may signal the economy will weaken this spring.
"The latest jobs data provide a useful reminder that this is still an uneven recovery in the U.S. economy," said Caroline Bain, commodities analyst at the Economist Intelligence Unit.
She expects oil prices to average less than $90 a barrel in the second quarter of 2013 "reflecting a comfortable market balance, lower refinery runs and only very modest growth in consumption."
The U.S. Energy Department last week reported that crude in storage was at its highest level since 1990 even though refiners had begun to ramp up gasoline production to get ready for the summer driving season. Now the economy looks like it might not grow fast enough to churn through the nation's high supplies.
"There is little scope for any more significant recovery because concerns about demand have regained the upper hand in the wake of weaker economic figures of late," said analysts at Commerzbank in Frankfurt. "Financial investors are likely to take advantage of any price increases to get out while they can."
Brent crude, which sets the price of oil used by many U.S. refineries to make gasoline, was up $1.34 to $105.46 on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Heating oil rose 3.94 cents to $2.9492 per gallon.
— Wholesale gasoline advanced 4.34 cents to $2.907 per gallon.
— Natural gas added 2 cents to $4.145 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.