Oil rose to a seven-week high above $82 a barrel on Friday after a report showed the United States lost fewer jobs than expected in February and on signals China will maintain its economic stimulus measures.
U.S. employers cut 36,000 jobs in February, leaving the unemployment rate unchanged at 9.7 percent, according to a government report. Analysts had expected non-farm payrolls to drop by 50,000.
Given the outlook for persistent job growth in the coming months, this data is very supportive for energy prices, said John Kilduff, partner at Round Earth Capital in New York.
U.S. crude for April gained $1.77 to $81.98 a barrel by 1404 GMT. It traded as high as $82.07, the highest intra-day price for a nearby contract since January 12. Brent crude for April advanced $1.90 to $80.44.
Oil gained in spite of a stronger dollar, which can weaken oil and other dollar-denominated commodities, as traders focused on the economic growth implications of the jobs data. Equity markets in Europe and the United States were both up on the day.
Signals that China will maintain its economic stimulus measures supported prices earlier in the session. China is the world's second-largest oil consumer, after the United States.
China's Premier Wen Jiabao, in his annual address to the National People's Congress, said the country will continue an appropriately easy monetary stance and an active fiscal policy.
China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a 4 trillion yuan ($585 billion) infrastructure program in late 2008.
But in the past two months, China has restricted the amount of money that banks can lend by enforcing higher cash reserve ratios, aiming to prevent an over-heating of the economy.
STRAIT OF MALACCA
A risk of disruption to shipping in the Strait of Malacca also supported prices.
Singapore raised alert levels in the city-state and beefed up security at its airport and new casino resorts after a warning by its navy on Thursday of possible attacks on oil tankers in the Strait of Malacca.
The Strait is a key shipping lane which carries about 40 percent of world trade, including an average of 15 million barrels of crude oil every day.
New York crude has traded in a $69-$84 range over the past few months amid uncertainty about the speed of the global economic recovery. Some traders and analysts say currency movements could dominate the oil price as the strength of demand remains unclear during the recovery.
Fundamentally, the oil market has yet to see some signs of improving demand from OECD states, while we are also concerned about the pretty much flat forward curve as investors still harbor worries over the cyclical recovery, VTB Capital analyst Andrey Kryuchenkov said.
Oil prices for contracts to be delivered in January 2012 are less than $5 a barrel above the current oil price.
(Additional reporting by Alejandro Barbajosa in Singapore and Robert Gibbons in New York; Editing by James Jukwey)