* Crude below Thursday's 5-month high above $84/bbl
* U.S. economy sheds jobs for fourth straight month
* French port strike enters 12th day
* OPEC seen leaving output unchanged at Oct. meeting
(Adds jobs data, recasts)
By Emma Farge
LONDON, Oct 8 (Reuters) - Oil prices hovered below $82 a
barrel on Friday, after news the United States shed jobs in
September, but concerns about the health of the world's largest
economy were offset by a drop in the dollar.
Nonfarm payrolls dropped by an unexpected 95,000 while
private employment, a better gauge of labour market health,
increased 64,000 after rising 93,000 in August, the U.S. Labor
Department said on Friday. []
U.S. crude for November <CLc1> rose 5 cents to $81.72 a
barrel by 1331 GMT after touching a five-month high of $84.43 a
barrel the previous day.
ICE Brent futures <LCOc1> were down 18 cents at $83.25 a
barrel by the same time.
"The number just confirms that we have a slow growth economy
and there's a lot of work to be done. But the silver lining is
that the private sector was on the positive side, though it
wasn't strong enough," said Jay Suskind, senior vice president
at Duncan-Williams in New Jersey.
A sharp drop in the dollar to a fresh 15-year low after the
U.S. jobs data caused oil to pare losses during the day. []
This week oil prices rallied on a weaker dollar. A cheap
dollar makes oil more appealing to both buyers holding other
currencies and those looking to shift from cash to commodities,
seen as safe havens.
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For graphics showing oil's correlations to the dollar and
non-farm payrolls, see here:
http://graphics.thomsonreuters.com/AS/0810/LRP_20100810131826.jpghttp://graphics.thomsonreuters.com/AS/0810/LRP_20100810155836.jpg^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
FUNDAMENTALS
But some analysts were wary that the dollar-fuelled rally
that pushed prices above $84 may not be backed by supply and
demand fundamentals.
Earlier this week, the U.S. Energy Information
Administration said domestic crude stocks rose by a
greater-than-expected 3.09 barrels last week and this could also
be weighing on prices, according to Tim Evans at Citi Futures
Perspective. []
"The larger issue remains the lack of physical tightness to
limit the downside...the (inventory) figures were bearish, not
bullish, and the downturn in prices serves as a reminder of
that."
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.
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.
A strike in the French port of Fos-Lavera, now in its 12th
day, has supported oil prices this week but news from the
industry lobby UFIP that two refineries can continue output for
a limited number of weeks dampened sentiment. []
The Organization of the Petroleum Exporting Countries (OPEC)
meets in Vienna next week for the first time in seven months.
Robust oil prices might induce OPEC to pump more crude,
helping to calm a rising market and limit damage to a fragile
economy, but the producer club is unlikely to agree a formal
change in output. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Anthony Barker)
