Oil stays near $98 as US economy shows improvement

The price of oil remained close to $98 a barrel Monday after figures showing stronger U.S. hiring suggested demand for crude could increase.

By early afternoon in Europe, benchmark U.S. crude for January delivery was down 2 cents at $97.63 a barrel time in electronic trading on the New York Mercantile Exchange. The contract closed up 27 cents at $97.65 on Friday.

U.S. data has been showing strong signs of economic recovery, helping the Nymex contract rise last week by nearly 6 percent, its largest gain since early July.

The Labor Department said Friday that the unemployment rate fell to a five-year low of 7 percent in November after employers added 203,000 jobs last month, more than expected. Earlier data showed the U.S. economy grew at a 3.6 percent annualized rate in July through September, the fastest since early 2012.

"Market participants have been encouraged by the recent string of positive economic data," said a note to clients from Sucden Financial Research in London.

Some investors remain cautious, however, as a stronger U.S. economy would pave the way for the Federal Reserve to pull back on its monetary stimulus program.

The Fed has been buying $85 billion a month in bonds to stimulate the economy, also known as quantitative easing. The program has kept interest rates low and has boosted the appeal of commodities like oil to investors looking for larger profits.

Prices were receiving support, meanwhile, from data showing that China's imports of crude oil rose an annual 3.2 percent during the first 11 months of the year.

Brent crude, a benchmark for international oils, was down 58 cents at $111.03 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

Wholesale gasoline rose was nearly flat at $2.727 a gallon.

Heating oil lost 0.16 cent to $3.0549 a gallon.

Natural gas gained 7 cents to $4.184 per 1,000 cubic feet.