By Grant Smith March 5 (Bloomberg) -- Crude oil rose in New York on speculation a U.S. employment report may show fewer job losses than forecast in the world’s largest energy user. Oil has climbed 1.2 percent this week, heading for its third weekly gain in four. Crude pared its decline yesterday after government data showed U.S. initial jobless applications fell in the week ended Feb. 27, easing concerns that today’s report will show a deteriorating labor market. “We’re higher this morning as the market consolidates before the jobs report,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “It’s really external factors like the currency markets directing oil right now, with the stronger dollar capping gains beyond $80.” Crude oil for April delivery rose as much as 60 cents, or 0.8 percent, to $80.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $80.59 as of 12:05 p.m. London time. Brent crude for April climbed 51 cents to $79.05 a barrel on London’s ICE Futures Europe exchange. Oil fell yesterday in New York as the dollar strengthened against the euro after European Central Bank President Jean- Claude Trichet kept the benchmark interest rate unchanged and extended stimulus measures. The dollar traded at $1.3586 to the euro at 11:30 a.m. London time, compared with $1.3581 yesterday. “The market is anticipating better unemployment data in the U.S. tonight, so that has given us a positive outlook,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Our expectations and prospects are for consumption of crude to pick up.” Initial Claims Initial jobless applications in the U.S. dropped by 29,000 to 469,000, in line with the median forecast of economists surveyed by Bloomberg, Labor Department data showed yesterday. A report due at 8:30 a.m. Washington time today may show payrolls declined by 65,000 workers last month, more than the prior month’s drop of 20,000, according to the median of economist estimates. Oil also gained on a report that the Organization of Petroleum Exporting Countries will reduce shipments by 2.3 percent in the month ending March 20. OPEC, which supplies about 40 percent of the world’s crude, will ship 22.87 million barrels a day in the four-week period, compared with 23.42 million a month earlier, the Halifax, England-based tanker-tracker Oil Movements said yesterday in a report. The data exclude Ecuador and Angola. OPEC Quotas OPEC Secretary-General Abdalla el-Badri said on Feb. 2 that ministers will be unlikely to alter their existing quota of 24.845 million barrels a day unless market conditions change. Compliance with this target is about 55 percent, according to Oil Movements. OPEC will next meet on March 17. U.S. crude inventories last week climbed a more-than- expected 4.03 million barrels to 341.5 million barrels, the Energy Department said on March 3. Stockpiles in the Gulf of Mexico region, where the majority of U.S. refining capacity is located, climbed by 1.8 million barrels. Some of that gain may be a result of the narrowing contango, when prompt prices are lower than later-dated supplies. The price difference between the April contract and May futures dropped to 42 cents a barrel today from 62 cents a barrel on Feb. 3. A theme in the market “has been the flattening of the prompt end of the price curve,” said Barclays Capital analysts in a March 3 research note. “We wonder if the collapse of the contango is causing the last dregs of the floating storage to start washing up in the U.S. data.” To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

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