By Edward Welsch Of DOW JONES NEWSWIRES Crude oil futures reversed slight declines early Friday morning following the release of U.S. employment data for January showed the unemployment rate unexpectedly falling to 9.7%. Light, sweet crude for March delivery recently traded 35 cents, or 0.5%, higher at $73.49 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 2 cents lower at $72.11 a barrel. The U.S. Labor Department reported Friday morning that the jobless rate declined to 9.7% last month, even as the economy shed 20,000 net jobs. The market had expected the unemployment rate would edge higher to 10.1% and for jobs to stay unchanged. "The jobless number dropping to 9.7% is giving the market a little bit of a boost and taking away from the concerns over the initial jobless claims that hit the market yesterday," said Phil Flynn, an analyst at PFGBest in Chicago. Friday's action follows a large drop in crude oil prices Thursday as a weak initial jobless claims number and fears about European sovereign debt triggered a sell-off in many assets, including other commodities, equities and European currencies. The March Nymex crude contract settled $3.84, or 5%, lower Thursday at $73.14 a barrel. Thursday's initial jobless claims data showed claims rising 8,000 to 480,000 for the week ended Jan. 30. Concerns over creditworthiness in Europe would continue to be a factor in the oil market Friday, Flynn said. "But if the stock market goes straight up and we don't get any negative headlines out of Europe, then oil will probably go along for the ride," he said. Addison Armstrong, an analyst at Tradition Energy in Stamford, Conn., said the oil market was likely to track the S&P 500 equity index Friday, but that continued strength in the U.S. dollar from overseas investors selling risky assets could put a damper on crude's gains and even make it retest its January low of $72.43 a barrel. Front-month March reformulated gasoline blendstock, or RBOB, recently traded 95 points, or 0.5%, lower at $1.9413 a gallon. March heating oil recently traded 73 points, or 0.4%, lower at $1.9279 a gallon. -By Edward Welsch, Dow Jones Newswires; 613-237-0669; edward.welsch@dowjones.com

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