oil prices rebounded sharply on Aug 3 as traders digested strong non-farm payrolls data in top crude consumer the United States and tracked ongoing tensions over Iran.Brent North Sea crude for delivery in September soared USD 2.68 to USD 108.58 per barrel in the late afternoon London deals. New York's main contract, West Texas Intermediate (WTI) light sweet crude for September, jumped USD 3.89 to USD 91.02 a barrel.
The market spiked as data showed that the US economy created 1,63,000 jobs in July, beating forecasts for a gain of 1,00,000. Markets fell yesterday after the European Central Bank announced no new action on the eurozone debt crisis one day after the US Federal Reserve opted against more quantitative easing (QE) measures.
"July non-farm payrolls smashed expectations and justified why the Fed avoided being drawn in to QE3 this week. Investors are happy, for now," said analyst Mike McCudden at online brokerage Interactive Investor.
"Crude oil prices rebounded from yesterday's losses with fairly dramatic gains today as a result of the weaker dollar and more upbeat sentiment," added CMC Markets analyst Brenda Kelly.
A weaker US currency makes dollar-denominated oil more attractive to buyers using stronger currencies, tending to lift crude demand and prices. Oil also won strong support this week from geopolitical tensions surrounding key producer Iran.