Oil prices lose ground ahead of US jobs report
Oil prices fell on Friday as traders awaited crucial payrolls data in top energy consumer the United States after a turbulent week in which the market tracked the global economic outlook.
Brent North Sea crude for delivery in October fell 34 cents to 76.59 dollars a barrel in midday London trade.
New York's main contract, light sweet crude for October, slipped 31 cents to 74.71 dollars.
"Crude oil markets are likely to wait for ... this afternoon's US employment data, which may show a lacklustre recovery," said Brenda Sullivan, head of research at Sucden Financial in London.
Later on Friday, at 1230 GMT, traders will digest US non-farm payroll figures -- combining government and private jobs -- which are forecast to show unemployment rising.
The US Labor Department is widely expected to report non-farm payrolls -- combining both government and private jobs -- shrunk by 120,000 in August.
Oil prices had risen on Thursday after a fresh batch of better-than-expected US figures on housing, benefits and factory orders which suggested the outlook was not as bad as had been feared.
Analyst Rebecca Seabury, at British-based energy consultancy Inenco, said that the market was reacting to the recent positive economic data but was also held back by high US crude inventories.
"The market has been responding to positive signs of economic activity in the Asian and US markets," she told AFP.
"However as a result of the global recession, US stock levels of oil are close to record levels, which is placing a downward pressure on prices.
"Until we see some reduction in US stocks, this will limit the market's response to indications of economic recovery."
Prices were supported in part on Thursday by hurricane concerns in the Gulf of Mexico, where many energy installations are based, and by news of an explosion on an oil rig in the region.
"Hurricane Earl and an explosion on an oil platform (on Thursday) were enough to send (New York oil prices) higher," noted PVM oil analyst Tamas Varga.
The oil market fell sharply on Monday and Tuesday as traders fretted over the pace of the US economic recovery and growing fuel inventories.
But on Wednesday, oil jumped higher in the wake of strong manufacturing data from the United States and China -- the world's two biggest consumers of oil.
© 2010 AFP