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Oil up on U.S. jobs, production rumors

WTI recovers from a weak close as payroll processor ADP shows modest employment growth.

By Daniel J. Graeber
Oil up on U.S. jobs, production rumors
Russian Foreign Minister Sergei Lavrov said he's open to production talks with OPEC, comments that triggered a modest rally in crude oil prices in early Wednesday trading. File photo by John Angelillo/UPI | License Photo

NEW YORK, Feb. 3 (UPI) -- Signs of a resilient U.S. labor sector and ongoing rumors about oil production deals pulled crude oil back above $30 per barrel in Wednesday trading.

Weak earnings reports from companies like Anadarko Petroleum and British giant BP dragged on crude oil prices during Tuesday trading, with West Texas Intermediate dipping below $30 per barrel by the end of the trading day.

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Crude oil prices are lower in response to weak demand in a lackluster economy awash in energy supplies. Chinese economic concerns added negative pressure to crude oil to start February.

Crude oil shot up last week after rumors circulated that Russia would meet with members of the Organization of Petroleum Exporting Countries to consider production cuts. Rallies fizzled after OPEC denied the rumors, but talk re-emerged Wednesday from Russian Foreign Minister Sergei Lavrov during a visit to Oman.

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"If at any moment consensus is achieved among all oil producing countries on the necessity of the meeting, we will, of course, be prepared to take part," he was quoted by Russian news agency Sputnik as saying.

Brent crude oil prices moved up 3.2 percent to start trading Wednesday in New York at $33.77 per barrel. WTI, the U.S. benchmark price for crude oil, gained 2.9 percent to open at $30.74 per barrel.

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U.S. labor figures last week showed a modest downturn, though private payroll processor ADP said there were some gains made in the private sector, with payrolls increasing by about 20,000 for January.

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"Franchise employment growth, though not as strong as the previous month, remained at double the pace of the labor market overall for the past twelve months," Ahu Yildirmaz, vice president for ADP research, said in a statement. "Auto parts and dealers and Restaurants, two segments that help signal consumer spending trends, added the most jobs."

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