* Oil briefly hits 6-week high of $72.84
* Prices look to fourth week of gains but downside seen
* U.S. July unemployment data better than expected
(Updates prices)
By Chris Baldwin
LONDON, Aug 7 (Reuters) - Oil retraced gains on Friday after
briefly touching a six-week high as markets wobbled on the
release of better-than-expected job-loss numbers out of the
United States.
By 1344 GMT U.S. light crude for September delivery <CLc1>
was down 44 cents a barrel to $71.50 after briefly touching a
high of $72.84.
London Brent crude <LCOc1> fell 51 cents cents to $74.32.
U.S. employers cut 247,000 jobs in July, far less than
expected and the least in any month since last August, according
to a government report providing the clearest evidence yet that
the world's largest economy was turning around. []
Analysts said the U.S. jobs data on Friday was a mixed bag
for crude traders, and that foreign exchange markets were more
likely to play a role in commodity pricing.
"On the one hand it was good for fundamentals for people to
be working and able to buy things; but it could mean Europe will
be seen as the lagging market and get people to short the euro
and a stronger dollar longer term," said senior analyst Chris
Jarvis at Caprock Risk Management in New Hampshire.
Global commodities are priced in the U.S. currency, which
erased losses following the U.S. jobs report to trade at session
highs versus the euro and climb more than 1 percent against the
yen. []
"FAIRLY RESILIENT"
For much of this year, oil prices have correlated closely
with stock markets, and Friday's initial bearishness coincided
with weaker equities as investors grew cautious ahead of the
U.S. non-farm payrolls data release. []
"The market still looks fairly resilient," analysts at MF
Global wrote in their daily energy report.
"However, at this stage, much rides on what U.S. equities
will do over the next few weeks, as they have indisputably been
the upside driver for most commodity complexes."
Looking forward, oil analysts have stood back from the past
four weeks of crude bullishness to express wariness over bearish
fundamentals, as U.S. oil inventories have stayed high and
global demand remained weak. []
In addition to swollen inventories on land, oil stocks have
again begun to build at sea.
The world's biggest independent oil tanker shipping group
Frontline <FRO.OL> on Thursday said around 50 very large crude
carriers (VLCCs) were storing nearly 100 million barrels of
crude at sea, particularly in the U.S. Gulf and Europe.
[]
Industry sources on Friday also told Reuters Morgan Stanley
was expected to store around 2.6 million barrels of gas oil on
ships off Europe []
"We continue to see sizeable risks to the downside for crude
in the near-term as weaker demand for crude will add to already
weak fundamentals for the complex," said JP Morgan analysts in a
weekly oil report.
"That said, our longer-term outlook is considerably more
positive as the expected boost in demand for the second half of
the year will begin to cut back on commercial inventories around
the world."
Oil now costs more than twice what it did in December when
it plunged to below $33, though it is still less than half last
July's record above $147.
(Additional reporting by Maryelle Demongeot in Singapore and
Robert Gibbons in New York; editing by xxx)
