Oil Fluctuates as U.S. Payrolls Grow, Manufacturing Gains Slow

April 1 (Bloomberg) -- Crude oil fluctuated after climbing to a 30-month high in New York as reports showed the U.S. added more jobs than forecast and construction spending dropped.

Futures rose above $107 a barrel for the first time since 2008 as the Labor Department said payrolls increased by 216,000 workers in March. Economists projected a 190,000 gain, according to the median estimate in a Bloomberg News survey. Construction spending in the U.S. fell 1.4 percent in February reducing the value of all projects to the lowest level since October 1999.

“We pulled back as investors bailed when we reached a new 2 1/2-year high,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Oil approached $108 a barrel, which is too high, given the fundamentals.”

Crude oil for May delivery rose 13 cents to $106.85 a barrel at 10:20 a.m. on the New York Mercantile Exchange. Futures reached $107.84, the highest intraday price since Sept. 26, 2008. Oil is up 26 percent from a year ago.

Brent oil for May settlement dropped 4 cents to $117.32 a barrel on the London-based ICE Futures Europe exchange. The contract reached $117.95, the highest level since March 7.

The U.S. jobless rate dropped to 8.8 percent in March from 8.9 percent the prior month, the fourth straight decrease, the Labor Department said today in Washington. The unemployment rate was projected to hold at 8.9 percent, according to the median forecast in a Bloomberg News survey.

Libyan rebels have been in retreat for three days as Muammar Qaddafi’s troops regained the initiative after almost two weeks of allied air strikes. The strife in Libya, holder of Africa’s largest oil reserves, is the bloodiest in a wave of uprisings that has toppled the leaders of Tunisia and Egypt and spread to Algeria, Bahrain, Iran, Oman, Syria and Yemen.

U.S. political and military leaders said they’re unwilling to start providing arms and training for rebels fighting against Muammar Qaddafi in Libya, as the defection of a senior aide undermined his regime.

--With assistance Sherry Su in London. Editors: Joe Link, Bill Banker

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net