Oil hovers below $81; weak dollar supports after poor data

                                
   * Nikkei falls 1.1 pct after jobs report; yen weighs
                                
 * Weak dollar, geopolitical risks could lend support
                                
 By Fayen Wong
                                
 PERTH, Aug 9 (Reuters) - Oil prices hovered just below $81
a barrel on Monday, as a weaker dollar supported prices that
had fallen for three straight days last week, in part on poor
U.S. economic data.
                                
 Analysts said the dollar, which is slipping towards a
15-year low against the yen, could, along with rumblings of
geopolitical tensions in the Middle East, continue to bolster
oil prices that last week ended above $80 for the first since
since May.
                                
 U.S. crude for September delivery <CLc1> edged up 18 cents
to $80.90 a barrel by 0055 GMT. The contract fell $1.31 or 1.6
percent to settle at $80.70 a barrel on Friday but ended the
week 2.2 percent higher.
                                
 London Brent crude <LCOc1> gained 17 cents to $80.33.
                                
 "The market is pretty directionless at the moment and oil
looks pretty well-priced considering the poor jobs data in the
U.S., which is underscoring the fragility of their economic
recovery," said Ben Westmore, a commodities analyst at the
National Australia Bank.
                                
 The U.S. economy lost 131,000 jobs in July -- more than
twice the decline of 65,000 that economists forecast in a
Reuters poll. And the closely watched private employment number
rose less than expected. [ID:nN05598486]
                                
 The gloomy data has further weakened the dollar in Asian
trade, with the greenback falling 0.08 percent against a basket
of currencies. <.DXY> [USD/]
                                
 Asian stocks are also likely to fall amid fading risk
appetite, with Japan's Nikkei average opening down 1.1 percent
on Monday.
                                
 Westmore said investors will keep their eyes peeled on
China's trade and industrial output data due mid-week, to gauge
how its economy is faring, with the Ministry of Commerce having
warned that the second half of the year would be a "grim"
period for Chinese exporters.
                                
 For a preview on China July export data, see
[ID:nTOE67307F]
                                
 For a preview on China July CPI, see [ID:nTOE673079]
                                
 Analysts at Australia & New Zealand Bank said reports of
escalating geopolitical tension in the Middle East could
provide some support to oil prices.
                                
 Iran showed off four new domestically made small submarines
on Sunday that Tehran said would bolster its defence capability
as it vows to confront any military threat from countries
opposed to its nuclear programme. [ID:nLDE6770B1]
                                
 In a sign that most investors remain bullish on oil prices,
open interest positions remained heavy at the September $85,
$90 and $95 call options on Friday, while money managers also
increased net long crude oil positions on the New York
Mercantile Exchange in the week through Aug. 3.
[ID:nN06679620][ID:nN06127438]
                                
 On the weather front, Tropical Storm Colin weakened to a
tropical depression in the Atlantic Ocean on Sunday as it
passed west of Bermuda, the National Hurricane Center (NHC)
said, adding the system could dissipate later in the day.
[nN08221231]
 (Reporting by Fayen Wong; Editing by Michael Urquhart)