Oil rises above $102 ahead of key US jobs report

Oil prices rose to above $102 a barrel on Friday as investors awaited the latest U.S. employment data for clues about crude demand.

By early afternoon in Europe, benchmark crude for February delivery rose 51 cents to $102.32 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.41 to settle at $101.81 in New York on Thursday.

In London, Brent crude was up 39 cents at $113.13 a barrel on the ICE Futures exchange.

Traders will be closely watching the Labor Department's jobs report for December, scheduled to be released later Friday. The department on Thursday reported another drop in the number of people filing for unemployment benefits, and ADP, which processes payroll data, said private employers added 325,000 jobs last month.

Crude has jumped from $75 in October amid signs the U.S. economy is slowly improving. The unemployment rate was 8.6 percent in November, and a further drop would signal to investors that as the economy strengthens, so too will demand for crude products such as gasoline and diesel.

"We expect any surprises out of the employment report to lean toward the bullish side," energy consultant Ritterbusch and Associates said in a report. "However, eurozone debt problems are a more critical determinant to oil over the next couple of months."

Traders are also closely watching rising tensions between Iran and Western powers. Iran has threatened to close the key oil passageway Strait of Hormuz as possible retaliation to new U.S. and European economic sanctions. The U.S. has said it will not tolerate such a move.

"As much as $5 to $7 of risk premium is imbedded in the oil market to account for the possibility of a disruption of tanker traffic through the Strait of Hormuz," Ritterbusch said.

In other Nymex trading, heating oil gained 3.37 cents at $3.0725 per gallon and gasoline futures added 1.67 cents at $2.7532 per gallon. Natural gas futures were up 2.7 cents to $3.007 per 1,000 cubic feet.

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Alex Kennedy in Singapore contributed to this report.

Associated Press

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