Oil climbs toward $82 as stock markets rally

Oil prices climbed toward $82 a barrel Monday as stock market gains encouraged investors to buy back into the crude market after heavy losses last week, when weak U.S. jobs figures disappointed expectations.

By early afternoon in Europe, benchmark crude for September delivery was up 94 cents to $81.64 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.31 Friday to settle at $80.70.

Oil's fall on Friday was sparked by a Labor Department report that showed private employers hired 71,000 workers in July -- way below the level needed to lower the unemployment rate which remained stuck at 9.5 percent.

That suggests U.S. demand for fuel will remain subdued as Americans keep a tight rein on personal spending.

"The number of jobs being created is hardly enough to keep up with natural population growth, let alone accommodate the millions of people who have lost work since the recession began," said Edward Meir, senior commodity analyst at MF Global in New York.

Asian stock markets were initially mixed Monday as investors absorbed the jobs figures but most indexes in Asia and Europe later moved into positive territory.

Several experts continued to highlight the fact that oil prices seem currently influenced more by technical considerations rather than fundamental principles of global supply and demand.

"The oil price is currently more influenced by technical indicators than by the demand-supply situation," said a report from Commerzbank in Frankfurt, which also said crude could come under pressure if it fell below the "psychologically important" mark of $80. "From a fundamental view, this decline would be welcomed, because the oil market continues to be in strong oversupply at current prices."

A similar conclusion was presented by JBC Energy in Vienna.

"The absence of upward support from the fundamental side -- given the still existing large stock overhang and the bleak economic outlook -- results in investment money being currently the strongest factor in the short-term ups-and-downs of oil prices," JBC said.

In other Nymex trading in September contracts, heating oil rose 2.46 cents to $2.1718 a gallon, gasoline gained 2.81 cents to $2.1408 a gallon and natural gas added 2 cents to 4.487 per 1,000 cubic feet.

In London, Brent crude was up $1.09 to $81.25 a barrel on the ICE Futures exchange.