Investing.com - Crude oil futures ended Friday's session modestly higher, bouncing off the lows after a U.S. government report showed oil supplies fell significantly more-than-expected last week.
Tepid U.S. non-farm payrolls data, which suggested the Federal Reserve will continue its quantitative easing program in the near term, provided further support.
On the New York Mercantile Exchange, light sweet crude futures for delivery in February rose 0.2% Friday to settle the week at USD93.08 a barrel by close of trade.
Prices rose to USD93.82 a barrel on Wednesday, the strongest level since September 19, after U.S. lawmakers approved a deal to avoid the fiscal cliff crisis.
On the week, New York-traded oil futures climbed 2.55%, the fourth consecutive weekly gain and the biggest advance in nearly three months.
Oil prices turned higher after the U.S. Energy Information Administration said that U.S. crude oil inventories fell by 11.1 million barrels last week, compared to expectations for a decline of 0.9 million barrels.
The report also showed that total motor gasoline inventories increased by 2.57 million barrels, above expectations for a gain of 1.95 million barrels.
The Energy Department released its weekly report two days later than usual because of New Year's Day holiday.
The supply data came after the U.S. Department of Labor said the economy added 155,000 jobs in December, easing from an upwardly revised increase of 161,000 in November.
The unemployment rate held steady at 7.8%, suggesting that the recovery in the labor market may be slowing.
The U.S. dollar moderated strong gains following the release of the lackluster U.S. employment data, as the still-high unemployment rate was likely to keep the Fed's bond-buying program in place for the indefinite future.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, retreated from the session high of 80.99 to settle the week at 80.61.
Oil prices often move inversely to the U.S. dollar, as the dollar-priced commodity becomes less expensive for buyers using other currencies.
New York-traded oil prices were down by more than 1% earlier in the session after the minutes from the Federal Reserve's most recent policy-setting meeting published late Thursday showed several Fed officials thought the central bank would be able to slow or stop its bond purchases well before December 2013.
The Fed's quantitative easing program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including oil.
In the week ahead, investors are likely to remain focused on U.S. political wrangling over fiscal policy.
U.S. lawmakers passed a compromise bill to avoid the fiscal cliff last week, however investors remained jittery over the longer term outlook, with negotiations on raising the U.S. debt ceiling still to come in February.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery dropped 0.65% Friday to settle the week at USD111.42 a barrel.
The London-traded Brent contract added 0.85% over the week, while the spread between the Brent and the crude contracts stood at USD18.34 a barrel.
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