Oil rises toward $107, U.S. jobs data eyed

by **Cals** Sat 11 Jan 2014, 01:19

Business & Markets 2014

Written by Reuters

Friday, 10 January 2014 20:27

10/01/14 19:43:54)

* Worries about Libyan supply underpin prices
* Growth in China's crude imports slows in 2013

LONDON/SINGAPORE (Jan 10): Oil rebounded from days of declines, to climb towards $107 a barrel on Friday, but gains were capped by speculation that strong U.S. data could prompt the Federal Reserve to further taper its stimulus.

Oil markets offered a muted reaction to mixed Chinese trade data, released earlier on Friday, with traders now awaiting a report on U.S. jobs, that are forecast to have risen by a solid 196,000 in December.

"We are at multi-week lows and you will get some buying at these levels, regardless of the U.S. payrolls data," said Michael Hewson, analyst at CMC Markets in London.

"Regardless of payrolls numbers this afternoon, you could see further declines. If figures are good, then the expectations will start to shift to the next Fed meeting... and the potential for more tapering."

Brent crude futures were up 53 cents at $106.92 per barrel, by 1133 GMT, after settling 76 cents lower, in a volatile session that saw the contract swinging by more than $2.

The benchmark was on track, to end the week flat, after falling to near two-month lows on Thursday, as investors weighed rising production in Libya, with increased tension in the country and elsewhere in the region.

U.S. oil rose by more than $1, before paring gains to trade 96 cents up, at $92.62 per barrel, at 1133 GMT. It touched an eight-month low of $91.24 on Thursday, and was on course to end lower for the second straight week.

"We're down quite a lot, since late December. The lows we saw in November and June last year, are acting as a barrier," Hewson said, referring to the Brent contract.

Technicals indicate that U.S. oil may rebound to $93.48, while Brent may bottom around $105.59, according to Reuters market analyst Wang Tao.

Iran and Russia

Iran and Russia are negotiating an oil-for-goods swap, worth $1.5 billion a month, that would let Iran lift oil exports substantially, in defiance of Western sanctions that helped force Tehran to agree to a preliminary deal, to end its nuclear programme.

Such a deal would add to world supplies and potentially have a downward effect on oil prices.

Oil prices were underpinned by data showing Chinese crude imports rose 13 percent in December, to a record 6.31 million barrels per day.

But imports by the world's No.2 consumer of oil, after the United States, rose by a smaller 4 percent in 2013, versus a near 7 percent annual increase in 2012.

Chinese trade data for December was also a mixed bag, with exports growing a little less-than-expected, at 4.3 percent from a year earlier, and imports outpacing forecasts, with an increase of 8.3 percent.

"The Chinese data released overnight, is pulling oil up," said Commerzbank analyst Carsten Fritch.

Uncertainty over supplies from the Middle East, have spurred volatility in oil markets, in recent days.