* Dollar strength, equities weakness weigh
* U.S. job cuts fewer than expected
* OPEC cautious about oversupply and fragile economy
(Recasts, updates prices, market activity, new byline, changes
dateline from LONDON)
By Edward McAllister
NEW YORK, Dec 4 (Reuters) - Oil prices fell below $76 a
barrel on Friday, pressured by a stronger dollar and weaker
equities which outweighed reaction from better-than-expected
U.S. jobs data.
U.S. crude futures <CLc1> fell 52 cents to $75.94 at 12:10
EDT (1710 GMT). Brent crude <LCOc1> fell 26 cents to $78.10.
The dollar rose above 90 yen for the first time in three
weeks, making dollar-denominated commodities like crude more
expensive for holders of other currencies.
Investors have been looking to economic data for signs of
global economic recovery and a potential rebound in energy
demand.
U.S. stocks sharply pared gains on Friday as the rising
U.S. dollar weighed on commodities and risk appetite ebbed.
[]
In earlier trading, crude rose to near $78 a barrel after
the U.S. Labor Department reported that employers cut only
11,000 jobs last month, the fewest in nearly two years. The
jobless rate edged down to 10 percent. []
But U.S. unemployment remains high and energy fundamentals
in the world's largest energy consumer are weak, keeping
analysts skeptical about crude's upside potential.
"Unemployment at 10 percent isn't an improvement, no matter
how many times you slice it. The early rally here is being
tempered by considerations of the overhang in petroleum
supplies," said Gene McGillian, analyst at Tradition Energy in
Stamford, Connecticut.
"In any case, the oil market is looking at the dollar and
its movement at this point could likely lead to a test of crude
support at $75," McGillian added.
OPEC
Olivier Jakob with Petromatrix said high oil inventory
levels in the United States, especially at the delivery point
of U.S. crude at Cushing, Oklahoma, have been putting more
pressure on U.S. oil prices than on North Sea benchmark Brent
crude.
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For graphics of oil stocks at Cushing versus Brent/U.S.
crude spreads, see the link below.
http://graphics.thomsonreuters.com/129/CMD_OKL1209.gif
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Oversupply and the fragile state of the global economy will
be among the issues facing the Organization of the Petroleum
Exporting Countries (OPEC) when it meets on Dec 22. Analysts
expect no change in OPEC's output policy.
OPEC's Secretary-General Abdullah al-Badri told Reuters on
Thursday the group should be cautious as it needs to balance
signs of economic recovery and abundant supplies.
He said oil inventories remained above their five-year
average and there were 165 million barrels of crude and
products floating at sea, equal to almost two days' global
demand and more than some estimates.
In terms of prices, the current band of $70-$80 is
satisfactory, Saudi Arabian Oil Minister Ali al-Naimi told
reporters in Cairo.
"Right now you see the price is okay between $70 and $80,
it's close to the target we set, it's almost $75 -- it's good,"
Naimi said, referring to the $75 level that he has said suited
producers and consumers. []
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, Ikuko Kurahone in London, Nick Trevethan in Singapore and
Robert Gibbons in New York; editing by Anthony Barker)
((Edward.mcallister@thomsonreuters.com; +1 646 223 6221;
Reuters Messaging:edward.mcallister.reuters.com@reuters.net))
