* Brent trims losses for the week, down 0.4 pct
* U.S. crude heads for second straight weekly gain
* Coming Up: U.S. nonfarm payrolls; 1230 GMT (Adds comments, updates prices)
By Luke Pachymuthu
SINGAPORE, May 3 (Reuters) – Brent crude held below $103 a barrel on Friday, holding on to most of its steep gains from the previous session when an interest rate cut by the European Central Bank boosted investors’ appetite for riskier assets.
The ECB’s decision came a day after the Federal Reserve recommitted to its aggressive stimulus programme, helping Brent trim losses for the week — down a slight 0.4 percent now versus a more than 3 percent decline at the end of Wednesday.
“Europe has always been about austerity, spending cuts and raising taxes, but with this rate cut decision we see a genuine shift towards a focus on growth,” said Ben Taylor, sales trader at the Sydney-based CMC Markets.
Brent crude was 17 cents lower at $102.68 a barrel by 0248 GMT, while U.S. crude for June delivery was down 19 cents a barrel at $93.80 a barrel.
Both contracts jumped around 3 percent overnight in their biggest single-day rally in almost six months.
Oil prices got a shot in the arm on Thursday after the ECB cut interest rates to record lows and from a report showing U.S. jobless claims dropped sharply to a five-year low — indicating the job market was still healing in the world’s largest economy and top oil consumer.
The ECB, which lowered its main rate by a quarter percentage point to a record low 0.50 percent, said it would prime banks with as much liquidity as they need until at least July 2014 and look at ways to boost lending to smaller companies, which are the lifeblood of Europe’s economies but have been starved of credit in many countries.
“This will likely encourage banks to lend and it will benefit small and medium enterprises. If they expand and then hire, it will go towards bringing down the unemployment number,” CMC Market’s Taylor said.
With the ECB and Fed decisions out of the way, investors are now turning their attention towards key U.S. nonfarm payrolls data expected later in the day.
A Reuters poll showed that U.S. nonfarm payrolls may have risen by 145,000 in April after hitting a nine-month low of 88,000 in March, but a lower-than-forecast increase in private hiring from Wednesday’s ADP National Employment Report raises the risk of a smaller number.
“This is going to be key for the week, if we get a really strong number then we are going to see even further momentum on oil,” Taylor said.
However, weak manufacturing activity in the United States and China is still clouding the outlook for oil demand from the top two consumers.
“I think the PMIs which we’ve seen this week still reminds us that in China we still need to see further evidence of stabilisation, and in the U.S. we want to see signs that is a little less stop-start,” Taylor said. (Editing by Himani Sarkar)
Source: Reuters
