Oil jumps to above $100 on weaker U.S. dollar
Oil prices jumped to above $100 a barrel Monday as investors bought back into the market made more attractive by last week's plunge and a weaker U.S. dollar.
By early afternoon in Europe, benchmark crude for June delivery was up $3.39 to $100.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.62 to settle at $97.18 on Friday.
In London, Brent crude for June delivery was up $3.77 to $112.90 a barrel on the ICE Futures exchange.
Oil prices fell 15 percent last week as the dollar strengthened and traders worried that slowing U.S. economic growth didn't justify a 35 percent increase from February to near $115 on May 2.
"Some market players see the lower price level as a buying opportunity," said analysts at Commerzbank in Frankfurt. "Even so, we think it is still too early to expect a quick return to the prices we saw before last week's slump."
The euro rose to $1.4386 on Monday from $1.4312 on Friday, making crude cheaper for non-dollar investors.
Some analysts are taking heart from a larger-than-expected increase in U.S. jobs last month. Non-farm payrolls rose by 244,000 jobs in April, while the unemployment rate rose to 9.0 percent from 8.8 percent in March.
"The fundamental backdrop in the market remains entirely unaltered, with global oil demand still showing continued strength," Barclays Capital said in a report. "The general (oil price) trend from here should be higher, rather than lower."
Other analysts expect oil to drop as higher U.S. gasoline prices — up 37 percent from a year ago — undermine crude demand. U.S. gross domestic product growth slowed to 1.8 percent in the first quarter.
"We expect oil to fall further as the global economy slows, the dollar continues to rebound, and the risk premium due to unrest in the Middle East eventually fades," Capital Economics said in a report.
In other Nymex trading in June contracts, heating oil rose 7.88 cents to $2.9245 a gallon and gasoline added 10 cents to $3.19 a gallon. Natural gas futures were up 2.7 cents at $4.262 per