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New York: Oil jumped more than three per cent to over $115 a barrel on Friday after better-than-expected US jobs data eased worries about the health of the US economy.
US crude oil futures for June delivery rose $3.08 to $115.60 as of 1526 GMT after touching a high of $115.75 a barrel. London Brent crude was $3.50 higher at $114.
The gains followed three days of losses amid concerns that economic weakness in the US would continue to blunt world oil demand growth.
World markets cheered a US government report that the economy lost only 20,000 jobs in April, a quarter the number economists had expected.
Surprisingly strong US factory order data improved sentiment further.
The dollar also climbed to two-month peaks against the yen and a basket of currencies yesterday.
The euro fell to $1.5360, the lowest since March 24, according to Reuters data. It traded back up at $1.5425 by midday, down 0.3 per cent on the day. For the week, the euro has weakened 1.3 per cent against the dollar, declining for a second straight week.
Against the yen, the dollar rose to 105.69, a two-month high, and has gained nearly one per cent against the yen on the week. It last traded at 105.29, up 0.8 per cent on the day.
The New York Board of Trade's US dollar index rose to two-month peaks at 73.698 and last traded at 73.422. It advanced 0.9 per cent for the week, it's third straight weekly gain.
The dollar also rose to a nine-week high versus the Swiss franc to 1.0606, before edging back down to 1.0563 francs. The greenback was up 2.08 per cent for the week against the franc and on pace for its largest weekly gain since last December.
Fed rate cut
The report further reduced the chances that the Federal Reserve would cut interest rates at its upcoming meetings, which burnishes the appeal of the dollar. It also backed a growing view that the US economic slowdown may not be as deep as some originally thought.
"The market likes the US jobs report and most are thinking that if we do slip into a recession, it's going to be mild and brief," said Matt Kassel, director of foreign exchange at ING Capital Markets.
The dollar was also mildly supported by a higher-than-expected rise in US. factory orders for March and news about the injection of additional liquidity by major central banks to stabilise credit markets.
Earlier, oil prices drew support from renewed clashes between Turkey and Kurdish rebels in northern Iraq.
Turkish planes attacked Kurdish rebel targets overnight, the latest in a series of strikes since Turkish ground troops crossed the Iraqi border in February.
Output disruptions in Nigeria and the lingering effects of a strike at Britain's Grangemouth refinery that temporarily shut down 700,000 barrels per day of North Sea oil production also lent support to the market.
ExxonMobil was restarting 800,000 barrels per day of production in the West African nation after reaching a deal with workers.
"Although the Grangemouth and Nigeria strikes may have been settled, they are only going to further tighten global balances. The market knows that and it knows its not going to get any more oil out of Opec."
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