* OPEC seen leaving output quotas steady at Oct. 14 meeting
* Technicals show oil may extend drop to $80
[]
* Coming Up: U.S. non-farm payrolls for Sept; 1230 GMT
(Adds context on Japan's yen intervention, updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 8 (Reuters) - Oil was steady on Friday,
having erased gains for the week, on speculation the U.S. jobs
market may have emerged from a soft patch, putting into
question the urgency of further monetary stimulus.
U.S. crude for November <CLc1> shed 3 cents to $81.64 at
0636 GMT, rebounding from a drop of as much as 0.7 percent to
$81.15 as the dollar erased gains. Oil fell 1.9 percent on
Thursday, when it touched $84.43, the highest since May 4. The
front-month contract is little changed from last week's close.
ICE Brent for November <LCOc1> added 8 cents to $83.51.
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"The dollar is the key short-term factor and the
reinstatement of the linkage with the dollar will stay for a
while yet," JP Morgan oil analysts led by Lawrence Eagles said,
referring to the inverse relation between the U.S. currency and
oil, which becomes dearer to most as the greenback strengthens.
New U.S. claims for jobless benefits hit a near three-month
low last week, a report showed on Thursday [],
suggesting some let up in labor market distress ahead of a
monthly report due later on Friday that is expected to show
non-farm payrolls were unchanged in September. []
U.S. non-farm payrolls data is due at 1230 GMT on Friday.
<USNFAR=ECI>
There is a risk that employment declined after an
independent report on Wednesday showed private employers
unexpectedly cut jobs by 39,000 in September. []
Investors have this week braced for the Federal Reserve to
start pumping more money into the U.S. economy next month to
boost growth, after the Bank of Japan on Tuesday surprised
markets with an interest rate cut.
"Spot oil prices are likely to continue to rise through the
start of winter," according to JP Morgan.
Expectations for an expansionary monetary policy have
driven the euro up 6 percent since August and also pushed the
greenback to a record low against the Swiss franc and a 15-year
low against the yen. The dollar weakened 0.2 percent against a
basket of currencies on Friday. <.DXY>
Japan indicated on Friday that it would continue to
intervene in foreign exchange markets when deemed necessary, on
the eve of a Group of Seven meeting where tensions over
competitive currency devaluation will be at the top of the
agenda. []
OPEC MEETING
The Organization of the Petroleum Countries (OPEC) meets in
Vienna next week for the first time in seven months, during
which prices have mostly stayed within the $70-$80 range the
group favours, despite persistent oversupply especially in top
oil consumer the United States.
Robust prices might induce OPEC to pump more, helping to
calm a rising market and limit damage to a fragile economy, but
it is unlikely to agree a formal change in output.
[]
"An important question to be asked is whether inventories
will tighten markedly as OPEC adopts policies to reduce the
stock overhang, or whether prices will move higher to choke off
demand and create inventory in the process," JP Morgan said.
Workers at a French refinery joined a strike at a key oil
port for only for a few hours on Thursday and said they would
resume protests next week as part of a nationwide day of wrath
over pension reforms. []
Investors took profits on Asian equities and gold while
also buying back some U.S. dollars on Friday, squaring up
before the latest U.S. employment report and potentially
contentious international meetings about currencies.
[]
(Editing by Ed Lane)
