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After week of declines, oil prices recover marginally

World oil prices swung higher on Friday, recovering a bit after losing more than six percent on the week as traders positioned ahead of the weekend.

New York's main contract, light sweet crude for delivery in November, gained US$0.48 to US$61.84 per barrel in closing deals, but lost 6.6 percent for the week.

In London, the price of Brent North Sea crude for November delivery added US$0.84 to close at US$59.21 per barrel, capping a 6.7 percent loss for the week.

Crude oil prices had fallen on global markets on Thursday to the lowest point for more than two months on evidence that energy demand was waning in the world's biggest consumer of energy.

Prices have lost about US$10 in London and New York since recently striking record high points.

Jim Still, analyst at Refco, said there remained "pressure on the downside" on oil prices but cited some "short covering at the very end of the day" ahead of the weekend.

The analyst said that supply concerns have eased while "demand appears to be poor," in the US market as consumers cut back on energy use.

"It appears that we have plenty of refined products coming from other countries, mostly from Europe," he said. "And this very much reassured the market of the supply the [US] refineries can't make up."

Jamal Qureshi at Petroleum Finance Company said a better-than-expected report on US payrolls was "ambiguously bullish" for oil, but acknowledged "you can read it in either direction."

Data released on Friday showed a net loss of 35,000 jobs last month. The job losses were less severe than the 150,000 decline feared by Wall Street economists following Katrina's devastation of the Gulf Coast, although experts cautioned that these figures may be revised.

Strong economic growth would lead to higher demand for petroleum and pressure on prices, so the report may have pushed up the market on Friday, Qureshi said.

Mike Fitzpatrick at Fimat USA said the market also was monitoring warnings about a possible terrorist threat to the New York subway system.

"Renewed threats of terrorism might also be a slight negative for what it implies about consumer behavior," he said.

Data on Friday showed more than 77 percent US oil production in the Gulf of Mexico was still offline along with 66.4 percent of natural gas output as the recover from Katrina and Hurricane Rita progresses slowly.

Industry data showed 12 refineries still closed along with Gulf Coast.

Gasoline futures, which have been near record territory recently, fell US$0.0113 to US$1.8292 per gallon (3.78 liters) while natural gas prices eased US$0.1490 to US$13.226 per million British thermal units.
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