* U.S. services sector growth slows in Aug, weighs on oil
* U.S. nonfarm payrolls slip less than expected in Aug
* Hurricane Earl weakens as it churns up East Coast
* Coming up: CFTC positions data at 3:30 p.m. EDT Friday
(Recasts, updates prices, market activity, new byline,
changes dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Sept 3 (Reuters) - Oil prices fell on Friday as
weak data on the U.S. services sector and easing storm concerns
pulled crude futures back from an earlier bounce on
better-than-expected U.S. August employment data.
The U.S. non-manufacturing sector grew in August for an
eighth straight month but at a slower pace than July and at a
rate below expectations, according to a report from the
Institute for Supply Management. []
"The ISM number let out some of the steam and pulled (crude
prices) back," said Chris Dillman, analyst at Tradition Energy
in Stamford, Connecticut.
Hurricane Earl weakened to a Category 1 storm as it churned
up the U.S. eastern seaboard toward New England and Canada and
already a refiner in Virginia reported normal operations in the
wake of the storm. [] []
[]
Earlier on Friday, crude prices bounced higher after a
report showed U.S. employment fell for a third straight month
in August, but declined far less than expected and there was an
unexpected rise in private sector hiring. []
U.S. crude for October delivery <CLc1> fell $1.36, or 1.81
percent, to $73.66 a barrel by 12:10 p.m. EDT (1610 GMT),
having traded from $73.20 to $75.44.
Prices need to finish above $75.17 a barrel to avoid ending
Friday with a loss for the week.
On Friday, ICE Brent for October <LCOc1> fell $1.13 to
$75.80 a barrel, after reaching a $77.46 earlier.
The weak data and easing storm worries helped the oil
market shrug off the weak dollar, which usually is supportive
to crude prices because it makes dollar-denominated oil less
expensive to consumers using other currencies and lowers the
value of the currency being paid to producers.
The U.S. dollar fell against a basket of currencies <.DXY>
and was weaker against the euro <EUR=>. []
U.S. economist Nouriel Roubini told Reuters Insider
Television he believed things could get worse in the United
States in the second half of the year and economic growth could
go below one percent.
"Even if it is not technically a double dip recession, it
is going to feel like a recession," said Roubini, who has been
nicknamed "Doctor Doom" for his pessimistic forecasts.
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Reuters Insider television: http://link.reuters.com/cax29n
Non-farm payrolls graphic: http://r.reuters.com/bup98n
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The strength of equities and oil prices based on
expectations of future economic growth as the recovery
progressed has helped keep the focus off high U.S. oil
inventories, tepid demand [] and the global spare
production capacity that remains available.
END OF DRIVING SEASON
Friday's U.S. data arrived ahead of a long weekend and
Monday's U.S. Labor Day holiday is traditionally considered the
end of summer driving-demand season.
Hurricane Earl's skirting of the U.S. eastern coast looked
on Friday as if it would pose less of a threat to the region's
oil refineries than to holiday driving.
On Thursday, the U.S. Energy Information Administration
said Hurricane Earl could affect 1.1 million barrels per day of
U.S. operable refinery capacity on the Atlantic coast, or about
7 percent of the nation's total. []
Even as the storm approached, the EIA and analysts noted
that bulging inventories would dull any impact of any refinery
capacity shut.
(Additional reporting by Gene Ramos in New York, Barbara
Lewis in London and Alejandro Barbajosa in Singapore; Editing
by Marguerita Choy)
