Oil bounces back over U.S. unemployment data, Egypt

>LONDON (Reuters) - Crude oil futures bounced back on Friday after U.S. data showed a smaller-than-expected gain in non-farm payroll jobs but a fall in the unemployment rate, while focus remained on Egypt as protests rolled into their 11th day. U.S. crude was $1.05 up at $91.59 a barrel by 9:13 a.m. EST (1413 GMT).

"data showed a smaller-than-expected gain in non-farm payroll jobs but a fall in the unemployment rate, while focus remained on Egypt as protests rolled into their 11th day"Brent crude for March rose by 40 cents to $102.16 a barrel.U.S. nonfarm payrolls grew just 36,000, well below forecasts for a 145,000 rise as the severe weather conditions impacted the hiring process, but the unemployment rate fell to its lowest level since April 2009."At face value the payroll data looks negative, but with revisions and weather maybe not as bad. But after the data the euro got hit, and the dollar stronger, which pulled crude down initially," Tom Bentz, broker at BNP Paribas commodity futures in New York said."Meanwhile markets are still concerned about Egypt unrest continuing. Traders may still be concerned about being short ahead of weekend."Protesters continued to camp in Cairo's Tahrir Square demanding President Hosni Mubarak leave Egypt, a focus of the wave of unrest in the Middle East and north Africa that has recently propped oil prices."Everybody is watching what is happening in Egypt, it seems to be a crucial day," Credit Agricole CIB analyst Christophe Barret said.Analysts said prices were likely to remain strong while the protests continue."The OPEC president has said that oil above $100 is not desirable but while Middle-East unrest continues prices will probably hold around here," Bache Commodities analyst Christopher Bellew said. "The terrible fear must be of this unrest spreading to a major producing country like Saudi."The unrest has not affected traffic on the Suez Canal or flows on the Suez-Mediterranean (SUMED) oil pipeline, which according to Barclays analysts could threaten around 4 million barrels per day of crude and product trade flows.Iran's OPEC governor Ali Khatibi was quoted as saying OPEC could raise its output quota in the event of a shortage of supply caused by any closure of the Suez Canal."Given the continued protests in Egypt and the risk of the troubles spreading to other Arab countries, crude oil should be well protected on the downside and Brent should manage to sustain the $100 mark," Commerzbank's Carsten Fritsch said.INFLATION WORRIESFront-month Brent has rallied more than $7 since unrest in Egypt started 10 days ago, from about $95 a barrel on January 25.

That 8 percent gain is more than a third of last year's total increase of 22 percent. Brent touched $103.37 on Thursday, the highest intraday price since September 26, 2008.JBC Energy consultants said in a note the rise in crude oil prices is however being overshadowed by the increase in other commodities such as copper and world food prices. 1 2 Next Tweet this Share this Link this Digg this Email Reprints