Oil turned positive and rose above $77 on Friday as closely watched U.S. data showed the smallest job loss figure since December 2007.
U.S. crude futures rose 65 cents to $77.09 at 1411 GMT, reversing an early drop to as low as $75.57. Brent crude rose 79 cents to $79.15.
U.S. employers cut 11,000 jobs in November, the smallest figure since the start of the recession in December 2007, government data showed on Friday..
The figure was also much fewer than the expected 130,000 job losses.
The data pushed the dollar up against the yen and modestly higher versus the euro.
Still, the unemployment rate remained high, capping gains in oil prices. The rate was 10 percent in November, compared with 10.2 percent in October.
"The take on the jobless data is positive, providing a lift to oil," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc. in New York corrected
"But the dollar's strength and the unemployment rate still at 10 percent are tempering bullishness somewhat."
The U.S. economy, the world's biggest energy consumer, has come out of recession but unemployment is lagging and has yet to turn.
OPEC
Olivier Jakob with Petromatrix said that high oil inventory levels in the United States, especially at the delivery point of U.S. crude at Cushing, Oklahoma, have been putting more pressure on U.S. oil prices than on North Sea benchmark Brent crude.
For graphics of oil stocks at Cushing versus Brent/U.S. crude spreads, see the link below.
http://graphics.thomsonreuters.com/129/CMD_OKL1209.gif
Oversupply and the fragile state of the global economy will be among the issues for the Organization of the Petroleum Exporting Countries (OPEC) when it meets on Dec 22. Analysts expect no change in its output policy.
OPEC's Secretary-General Abdullah al-Badri told Reuters on Thursday the group should be cautious as it needs to balance signs of economic recovery and abundant supplies.
He said oil inventories remained above their five-year average and there were 165 million barrels of crude and products floating at sea, equal to almost two days' global demand and more than some estimates.
In terms of prices, the current band of $70-$80 is satisfactory, Saudi Arabian Oil Minister Ali al-Naimi told reporters in Cairo.
"Right now you see the price is okay between $70 and $80, it's close to the target we set, it's almost $75 — it's good," Naimi said, referring to the $75 level that he has said suited producers and consumers.
