West Texas Intermediate crude headed for the biggest weekly gain since July as the U.S.jobless rate dropped to a five-year low, bolstering the outlook for economic growth in the world’s biggest fuel-consuming nation.

Futures are headed for a 5.2 percent weekly advance. The Labor Department reported today that the unemployment rate fell to 7 percent in November. Consumer confidence rose more than forecast in December to the most in five months. Government data on Dec. 4 showed that U.S. crude supplies fell for the first time in 11 weeks as fuel demand increased.

“These were spectacular jobs numbers and will ultimately be supportive for energy prices,” saidJohn Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’ve already seen demand pick up, and this is a signal that it will be stronger going ahead.”

WTI for January delivery rose 20 cents, or 0.2 percent, to $97.58 a barrel at 10:58 a.m. on theNew York Mercantile Exchange. The contract touched $98.07, the highest intraday price since Oct. 29. The volume of all futures traded was 14 percent below the 100-day average.

Brent for January settlement increased 36 cents, or 0.3 percent, to $111.34 a barrel on the London-based ICE Futures Europe exchange. Volume was 31 percent below the average.

The European benchmark crude traded at a $13.76 premium to WTI. The spread was $13.60 yesterday, the narrowest based on closing prices since Nov. 19.

U.S. Economy

Payrolls rose 203,000 last month after a revised 200,000 advance in October. The median forecast of 89 economists surveyed by Bloomberg called for a 185,000 advance.

“When people are working, they drive more,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “The miles driven will increase, which will be supportive for gasoline demand.”

The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the strongest since July, from 75.1 in November. Economists forecast an increase to 76, according to the median estimate in a Bloomberg survey.

Futures fell earlier on concern that improving economic data will spur the Federal Reserve to curb its stimulus program. In a Bloomberg Global Poll Nov. 19, four of five investors said they expected the Fed to put off a decision to start cutting its $85 billion-a-month in bond buying until March 2014 or later. The Federal Open Market Committee meets Dec. 17-18.

U.S. gross domestic product grew in the third quarter at a 3.6 percent annualized rate, the strongest level since the first three months of 2012, the Labor Department reported yesterday. It exceeded a median forecast of 3.1 percent in a Bloomberg survey. As the world’s largest oil consumer, the U.S. will account for about 21 percent of global demand this year, according to the Paris-based International Energy Agency.

“This increases the likelihood that loose monetary policy will soon come to an end and the Fed will curtail bond purchases,” Kilduff said.

Sourced from Bloomberg