LONDON, April 4: Oil prices jumped close to $106 on Friday as investor sentiment was driven by the weak US dollar, tight energy supplies and more bad news on the US economy, analysts said.

On Friday, New York’s main oil contract, light sweet crude for delivery in May, jumped $1.92 to $105.75 per barrel, after earlier touching $105.97.

London’s Brent North Sea crude for May rallied $1.78 to $104.30.

“Crude futures were higher as the dollar weakened,” said Sucden analyst Nimit Khamar in London. The weak US currency tends to encourage demand for dollar-priced crude because it becomes cheaper for foreign buyers.

The US unit sank further against the euro on Friday after news that US employers cut a surprisingly large 80,000 jobs in March, the biggest decline in employment in five years, according to a government report.

The mounting job losses swelled the national unemployment rate to 5.1 per cent last month compared with 4.8 per cent in February.

“The bad jobs number is basically reinforcing the idea that the US interest rates will come down,” said Alaron Trading analyst Phil Flynn.

He added that “bad economic news is good for commodities” in the near term.

This week, the oil market was gripped by volatility as traders weighed the likely slowing of global economic growth against concerns about tight energy supplies.

Many traders are concerned that slowing US growth could prompt a slowdown in demand because the United States is the world’s biggest consumer of energy.

On Wednesday, however, prices soared after news that US gasoline (petrol) reserves tumbled 4.5 million barrels, compared with forecasts for a smaller drop of 2.5 million barrels.—AFP