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Oil falls slightly to near $91 in Europe but largely holds gains after stronger US jobs growth
Oil slipped slightly to almost $91 a barrel Monday, but managed to hold on to most of the big gains from the previous session after the U.S. reported better-than-expected jobs growth.
By early afternoon in Europe, benchmark crude was down 36 cents at $91.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $4.27 on Friday to settle at $91.40 in New York.
In London, Brent crude was down 79 cents at $108.12 on the ICE Futures exchange.
"Mild profit-taking is being seen, with Brent and WTI easing back from Friday's highs," said analysts at Sucden Financial in London, adding that trading volumes were "notably thin" and they expected markets "to remain quiet with currency fluctuations key to short-term movements."
A stronger dollar usually helps lower oil prices by making crude more expensive ¯¯¯ and a less attractive investment ¯¯¯ for traders holding other currencies. On Monday, the euro was down to $1.2357 from $ 1.2388 on Friday.
The U.S. Labor Department said Friday that employers added 163,000 jobs in July, the most since February. The stronger jobs growth boosted investor optimism that the U.S. economy is improving and helped fuel a stock market rally Friday that continued in Asia on Monday. Stocks were slightly lower in early trading in Europe.
Crude has jumped from $77 in June as fears of a global recession faded. But some analysts expect global oil supplies will likely recover from a spate of recent outages and push prices lower.
"Given the evolving supply picture, we retain the view that Brent crude prices are likely soon to find resistance and converge back toward $95," J.P. Morgan said in a report.
In other Nymex energy trading, wholesale gasoline futures were down 2.91 cents at $2.9019 a gallon and heating oil slid 1.21 cents to $2.9140. Natural gas fell 7.1 cents to $2.806 per 1,000 cubic feet.
Alex Kennedy in Singapore contributed to this report.