Crude futures rose on Friday as U.S. unemployment data eased concerns about demand in the world`s top oil consumer, with both benchmarks set for a weekly gain ahead of U.S. sanctions on Iranian oil exports.
The U.S. Labor Department`s employment report showed that average hourly earnings increased 0.3 percent in September, while the unemployment rate fell to near a 49-year low of 3.7 percent.
"A strong economy, low unemployment would suggest the U.S. consumer is going to continue to fare well with higher energy prices," said Phil Flynn, an analyst at Price Futures Group in Chicago.
U.S. West Texas Intermediate (WTI) crude futures rose 35 cents to $74.68 a barrel by 1:07 p.m. EDT (1707 GMT).
Brent crude futures gained 9 cents to $84.67 a barrel. On Wednesday, the global benchmark hit a late 2014 high of $86.74.
Both benchmarks were on track for a weekly gain of about 2 percent.
Oil prices at four-year highs have triggered concerns about demand as U.S. President Donald Trump has blamed the Organization of the Petroleum Exporting Countries for rising gasoline prices for American consumers.
Prices have eased slightly after Saudi Arabia and Russia said they would raise output to at least partly make up for expected disruptions from Iran, OPEC`s third-largest producer, due to the sanctions that take effect on Nov. 4.
But the pull-back did little to dent a 15-20 percent rise in oil prices since mid-August, which has pushed them to their highest since late 2014.
Washington wants governments and companies around the world to stop buying Iranian oil to put pressure on Tehran to renegotiate a nuclear deal.
However, India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating that the world`s third-biggest oil importer is to continue purchasing crude from the Islamic republic.
Many analysts say they expect Iranian exports to drop by around 1 million barrels per day (bpd).
"Iranian exports could fall below 1 million bpd in November," U.S. bank Jefferies said. "It now appears that only China and Turkey may be willing to risk U.S. retaliation by transacting with Iran."
The investment bank said there was enough oil to meet demand, but "global spare capacity is dwindling to the lowest level that we can document."
However, Goldman Sachs says the rally may not last.
"While upside price risks will prevail for now, fundamental data outside of Iran has not turned bullish in our view," Goldman said in a note to clients.
"We expect fundamentals to gradually become binding by early 2019 as new spare capacity comes online... pointing to the global market eventually returning into a modest surplus in early 2019."
U.S. drillers cut two oil rigs in the week to Oct. 5, General Electric Co`s Baker Hughes energy services firm said on Friday, as rising costs and pipeline bottlenecks in the nation`s largest oil field have hindered new drilling since June.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)