Oil posted the biggest weekly gain since July as US Federal Reserve Chairman Jerome Powell sought to calm fears of a possible recession following a lackluster jobs report that was seen as dimming the demand outlook.
Futures in New York rose 0.4 percent on Friday, erasing earlier losses.
Powell said that the most likely outlook for the US and world economy is continued moderate growth, but the central bank was monitoring “significant risks.”
The market also drew support from a US report that showed the country’s rig count had declined for the third week, implying a slowdown in domestic oil production.
“The oil market and equities market are reacting positively to remarks by Powell that the Fed is not expecting or forecasting a recession,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston, Texas.
The US Department of Labor on Friday reported that employers added 130,000 new jobs in August, somewhat undershooting economists’ estimates and adding to fears of a weakening economy.
West Texas Intermediate oil for delivery next month gained 22 cents to settle at US$56.52 a barrel on the New York Mercantile Exchange. It was up 2.6 percent for the week.
Gasoline’s spread to crude, also known as the gasoline crack, rose as much as 11 percent for the largest weekly gain since July as gasoline futures strengthened.
Brent for November rose US$0.59 to settle at US$61.54 a barrel on the ICE Futures Europe Exchange, ending the week up 1.8 percent.
The global benchmark traded at a US$5.11 premium to West Texas Intermediate for the same month.
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