Oil dips in cautious trade ahead of US jobs report
Oil prices slipped in cautious trade Friday as investors awaited the release of a US jobs report for August that could determine the Federal Reserve's timetable for hiking interest rates.
US benchmark West Texas Intermediate (WTI) for October delivery lost 36 cents to $46.39 per barrel.
Brent North Sea crude for October dropped 27 cents in mid-day London deals to $50.41.
"With the Federal Reserve closely eyeing employment figures in order to gauge the strength of the economy, US non-farm payrolls should be crucial," said Daniel Ang, investment analyst at Phillip Futures in Singapore.
"If non-farm payrolls turn out lower than expected, this could suggest a December 2015 rate hike instead" of a move this month, Ang said.
A rate hike would likely strengthen the greenback, making dollar-priced oil more expensive to holders of weaker currencies, hurting demand and prices.
But the crude market also remains under pressure from Saudi Arabia's policy of oversupply and its new drop in its export prices, especially towards Asian countries, in order to protect its share of the global market.
"Thanks to the expansionary production policy pursued by Saudi Arabia and record-high oil production in Iraq, the oil market is significantly oversupplied. In addition, there is the prospect of additional oil from Iran," after Western sanctions are lifted as part of the landmark nuclear deal, said analysts at Commerzbank.
Prices have fluctuated wildly in recent weeks on uncertainty about Fed monetary policy as well as worries about the strength of the economy of number-one energy consumer China.
Tuesday saw them turn sharply lower after weak manufacturing data from China and the United States. They had surged more than 25 percent over the three days before that.
© 2015 AFP