Brent futures break above $109

Outlook on US economy steadies as unemployment claims drop for third week in a row

Oil pumpjacks are seen during sunrise in Williston, North Dakota March 14, 2013. REUTERS/Shannon Stapleton

Oil pumpjacks are seen during sunrise in Williston, North Dakota March 14, 2013. REUTERS/Shannon Stapleton

Fri, Mar 15, 2013, 08:08

Brent futures rose above $109 (€83.60) a barrel this morning as strong US jobs data fuelled hopes of a better outlook for demand in the world's top oil consumer, while simmering concerns over supply from the Middle East added support.

Investors took on more risk as new unemployment claims dropped for the third week in a row, added to a string of positive numbers suggesting a steady recovery in the US.

Oil got a further boost after President Barack Obama said military force remained an option if sanctions and diplomacy failed to thwart Iran's nuclear ambitions.

Brent crude rose 50 cents to $109.46 a barrel in early morning trade, gaining for a second day, reversing four straight days of losses.

The April contract, which expired on Thursday, settled 90 cents higher, but the benchmark is poised for its fourth weekly decline in five weeks.

US oil gained 21 cents to $93.24 a barrel, and is set to post its second straight week of gains.

Iran was still more than year away from developing a nuclear weapon Obama said in an interview with Israel i television broadcast on Thursday, just six days before his visit to Israel.

Worries the standoff between the West and Iran over the Islamic Republic's controversial nuclear programme will escalate and disrupt oil supplies have kept Brent above $100 a barrel through most of 2012 and this year despite weak demand.

The lower new unemployment claims pushed the Dow Jones industrial average to extend its winning streak to 10 days yesterday, a string of gains last seen in late 1996, to end at another record high.

The S&P 500 took a late-day run at its record closing high of 1,565.15, but ended just 2 points away.

Reuters