(Updates prices, adds comment)
LONDON, March 7 (Reuters) - Oil fell a dollar on Friday
after an unexpected fall in U.S. jobs data heightened fears of a
recession in the United States, the world's top oil consumer.
U.S. light crude for April delivery <CLc1> was $1.30 lower
at $104.17 a barrel at 1511 GMT. It had hit a new record high of
$105.97 on Thursday.
London Brent crude <LCOc1>was down 97 cents at $101.64.
"The market is concerned that weakness in the U.S. economy
could lead to weakness in U.S. oil demand," said Mike Wittner,
global head of oil research at Societe Generale.
Wittner said the fall could be a kneejerk reaction, as the
oil market has recently ignored bearish U.S. economic data,
seeing it leading to interest rate cuts and weakness in the
dollar which in turn has led to higher oil prices.
Oil prices received support earlier from the falling dollar
which slid to new record lows on Friday against the euro <EUR=>
and the Swiss franc.
A steady decline in the U.S. dollar has been a factor
pushing prices higher along with fund flows into commodity
markets as investors seek a hedge against inflation.
Oil prices jumped this week after a surprise fall in crude
stocks in top oil consumer the United States and after OPEC
decided against changing output policy at its meeting in Vienna,
despite consumers' calls to pump more oil.
The oil exporters' group, which pumps more than a third of
the world's oil, has long argued high oil prices do not reflect
oil market fundamentals and are being driven by speculation.
Influential Saudi Oil Minister Ali al-Naimi reiterated the
view in remarks published on Friday, saying speculation was
behind triple-digit oil and made it impossible for any
organisation to control price movements.
"Today there is no link between oil (market) fundamentals
and prices," he told Moroccan newspaper Asharq al-Awast.
"The duty of oil exporters is to make sure that fundamentals
are healthy," said Naimi. "If these fundamentals were stable and
fulfil market needs, then there is no need to raise or decrease
production," he added.
OPEC's argument that there is enough oil has been backed by
steadily rising crude inventories in the United States, but a
U.S. government report released after the group's meeting on
Wednesday showed crude stocks fell by 3.1 million barrels last
week, against analysts' forecasts for an increase. []
OPEC will next meet in September, although ministers could
confer informally at a conference between consumers and
producers in Rome on April 20-22.
"Leaving things so open ended gives me and others a clear
impression that the cartel is prepared to let prices run away
for the time being. Perhaps they feel the weakness in the dollar
would offset any rise in price," said Rob Laughlin at MF Global.
Tensions between OPEC member Venezuela, a top oil exporter
to the United States, and neighbour Colombia, have also
underpinned oil prices.
Venezuela deployed forces toward the Colombian border on
Wednesday, after Colombia last weekend launched a raid against
rebels inside OPEC member Ecuador.
(Reporting by Margaret Orgill and Santosh Menon; editing by
Anthony Barker)
