LONDON: Brent crude extended gains above $113 on Friday after data showed the US economy created jobs at the fastest pace in nine months in January, spurring hopes this could stimulate demand at the world's top consumer. A warning by Iran's supreme leader of retaliation over an oil embargo "at the right time" also supported oil prices. By 1440 GMT, front-month Brent crude was up $1.63 at $113.70 a barrel, gaining for a fourth consecutive day. US crude rose by 64 cents to $97.00 a barrel, reversing five straight sessions of losses. US nonfarm payrolls jumped by 243,000 versus expectations for a gain of only 150,000 in January. U.S. unemployment rate also dropped to a near three-year low of 8.3 percent, indicating last quarter's growth carried into early 2012. "The jobs number came much better than expected and gave the (crude) market a nice pop, but the question will be whether this is really a reflection of the entire economy," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "We'll be watching to see if the rally in the Brent/WTI spread starts to top out, because the fundamentals in the EIA data (rising stockpiles, weak demand) are still there." On the geopolitical front, worries about the growing war of words between Iran and Western powers was in focus after Iran's Ayatollah Ali Khamenei said Tehran would not yield to international pressure to abandon its nuclear program. "Sanctions will not have any impact on our determination to continue our nuclear course … In response to threats of oil embargo and war, we have our own threats to impose at the right time," Khamenei said in a speech marking the anniversary of the 1979 Islamic Revolution broadcast live on state television. "This news flow should continue to build a Brent premium, and could widen the Brent-WTI (US crude) spread," Commerzbank oil analyst Carsten Fritsch said. The spread between the two benchmark crudes stood at $16.62 a barrel by 1400 GMT. The Washington Post reported U.S. Defense Secretary Leon Panetta was concerned about the increased likelihood that Israel could launch an attack on Iran as early as April. CNN said it confirmed the report, citing a senior Obama administration official, who declined to be identified. Gains from geopolitical and macro economic factors were kept in check by worries about the ongoing negotiations between heavily indebted Greece and its creditors. Demand Outlook In China, the world's second largest oil consumer, net crude oil imports are expected to rise 5.9 percent this year, the slowest growth rate since 2006, as a slack export market cuts into consumption, local media reported on Friday, citing a report by top oil firm China National Petroleum Corp. Net crude imports are estimated at 266 million tons, or 5.32 million barrels per day (bpd), in 2012 versus 251.26 million tons (5.03 million bpd) last year, according to the report in the Beijing Times. Oil investors remained worried that Europe's debt crisis could worsen and hurt the global economy. Retail sales in the euro zone tumbled unexpectedly in December, the biggest drop in the Christmas period in three years, with rising joblessness and stubborn inflation undercutting signs of stabilization. The euro zone's finance ministers aim to agree on a second financing package for Greece on Monday and help contain the two-year old crisis. –Additional reporting by Robert Gibbons in New York and Manash Goswami in Singapore.
