Crude climbs on US jobs report, China talks

Crude rose more than $1 a barrel on Friday morning and oil prices were on track for their first weekly gain in three weeks after a favorable U.S. jobs report and resumed trade talks between U.S. President Donald Trump and Chinese leader Xi Jinping, raising hopes for growth in the world's two largest economies.

Brent crude futures gained $1.28, or 1.96%, to $66.62 a barrel by 1649 GMT. U.S. West Texas Intermediate crude climbed $1.34, or 2.11%, to $64.71.

On a weekly basis, both benchmarks were on track to settle higher after declining for two straight weeks. Brent has advanced 2.75% this week, while WTI is trading 4.9% higher.

"I think the jobs report was Goldilocks," said Phil Flynn, senior analyst with the Price Futures Group. "It was not too hot, not too cold but just right to increase the chances for an interest rate cut by the Federal Reserve."

The U.S. Labor Department's monthly employment report showed the unemployment rate held steady at 4.2% last month. Employers added 139,000 jobs, which combined with downward revisions to prior months' estimates showed a cooling in labour demand but nothing abrupt; by comparison, job gains averaged 160,000 last year.

A rate cut by the U.S. central bank, much desired by the Trump administration, is seen as a way to increase spending, raising demand for petroleum.

Flynn also said the planned output hike announced by OPEC+ to begin in July would likely be absorbed by higher demand, keeping supply tightly balanced with demand.

China's official Xinhua news agency said trade talks between Xi and Trump took place at Washington's request on Thursday. Trump said the call had led to a "very positive conclusion", adding the U.S. was "in very good shape with China and the trade deal".