Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery
Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery Reuters

On signs that the U.S. economy is back on track and tensions with Iran may lead to further disturbance in exports in the Middle East countries, crude oil futures headed for a weekly gain in New York. Futures of West Texas Intermediate have surged 3.4 percent this week.

Meanwhile, the European Union is trying to stop oil purchases from Iran. According to EU spokesman Michael Mann, European foreign ministers are expected to announce more stringent penalties on the Persian Gulf nation's energy and banking industries at a forthcoming meeting Jan. 30, Bloomberg reported.

The recent string of better-than-expected macroeconomic indicators from the U.S. has rebuilt some of the optimism and risk appetite, Bloomberg quoted Thina Saltvedt, an analyst at Nordea Bank AB in Oslo, as saying.

Iran has threatened to close the Strait of Hormuz, which would have an immense effect on the global oil market.

Benchmark crude for February delivery was at $102.22, up 41 cents, at 10:04 a.m. London time. The contract fell $1.41 to settle at $101.81 in New York Thursday. This was the lowest settlement this week.

In London, Brent crude for February settlement was up 60 cents (0.5 percent) at $111.34 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at $11.12 premium to New York-traded West Texas Intermediate crude, according to reports.

According to economists, employment in the U.S. possibly hastened in December for a second month, which indicates to an increasing labor market en route 2012. Traders will be having a close watch at the Labor Department's jobs report for December, which is scheduled for a late Friday release.

Amid signs that the U.S. economy is slowly improving, crude oil jumped from $75 in October. In November, the unemployment rate was 8.6 percent. If there is further drop in the rate, it would signal investors that as the economy is coming to back on track, the demand for crude products will also go up.

We expect any surprises out of the employment report to lean toward the bullish side, energy consultant Ritterbusch and Associates said in a report. However, eurozone debt problems are a more critical determinant to oil over the next couple of months.

According to the Energy Department, U.S. crude stockpiles (DOESCRUD) climbed 2.2 million barrels last week while a Bloomberg News survey forecast a decline of one million barrels.