Oil prices rose Friday on expectations of another large drop in U.S. drilling.
Prices held their gains after U.S. data showed stronger-than-expected job growth in February. The U.S. added a seasonally adjusted 242,000 jobs last month, the Labor Department said Friday, more than the gain of 200,000 that economists had expected.
Increased employment can add to oil demand, as more commuters drive to work. “[More] workers are getting to and from work, and they’re driving,” said Carl Larry, director of oil and gas at Frost & Sullivan.
Light, sweet crude for April delivery recently rose 16 cents, or 0.4%, to $34.73 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 32 cents, or 0.9%, to $37.39 a barrel on ICE Futures Europe.
Traders are waiting on the latest oil rig count to be released Friday at 1 p.m. EST by Baker Hughes Inc. The number of active rigs drilling for crude in the U.S., viewed as a rough proxy for activity in the oil industry, has fallen sharply since oil prices began to fall.
The number of rigs drilling for oil and natural gas in the U.S. stood at 502 last week, near the record low of 488 rigs, according to Baker Hughes data starting in late 1948.
“We’re starting to see a lot of erosion in U.S. production,” Mr. Larry said. “We’re inching our way back to $40.”
U.S. oil output, however, hasn’t fallen by as much as drillers have increased their efficiency and employed new technologies.
Talks among major producers like Russia and members of the Organization of the Petroleum Organization about freezing their output has boosted prices in recent weeks.
Ibe Kachikwu, Nigeria’s minister of state for petroleum resources, said on Thursday that a meeting between OPEC and non-OPEC countries will take place on March 20 in Moscow to “fine-tune collaborative strategies,” according to a statement from the Nigerian National Petroleum Corp.
Iran, however, has indicated that it won’t join the freeze plan. Some analysts are also skeptical of the plan because some countries’ January output levels were near record highs.
Gasoline futures rose 1.3% to $1.315 a gallon. Diesel futures rose 0.5% to $1.1259 a gallon.