UPDATE 1-Oil falls below $68, off seven-month high

                                
 * Oil falls below $68 after 7-month high above $70
                                
 * Strong dollar weighs but slips after Friday's gains
                                
 * Japan's Nikkei higher
 (Recasts lead, headline, updates prices, recasts dollar
falling)
                                
 By Maryelle Demongeot
                                
 SINGAPORE, June 8 (Reuters) - Oil fell below $68 a barrel
on Monday after a stronger U.S. dollar and profit-taking
prompted a retreat from a seven-month high above $70 hit last
week.
                                
 The dollar edged slightly down on Monday, after posting its
largest one-day gain in more than five months on Friday on data
showing the pace of U.S. job losses slowed sharply in May,
prompting fears of an earlier-than-expected rise in U.S.
interest rates. [USD/]
                                
 A stronger dollar makes commodities such as oil, which is
denominated in the currency, look more expensive to holders of
other currencies.
                                
 U.S. light crude for July delivery <CLc1> fell 48 cents a
barrel to $67.96 by 0437 GMT, off an intraday low of $67.78,
having settled 37 cents lower on Friday at $68.44.
                                
 London Brent crude <LCOc1> was down 49 cents at $67.85 a
barrel.
                                
 "We could see more strength in the dollar this week and a
short-term correction and consolidation in the commodities
complex. It also looks like there is some technical resistance
at $70," said Toby Hassall, head of research for Commodity
Warrants Australia.
                                
 U.S. futures rose to $70.32 a barrel on Friday, a
seven-month high for the front-month contract, before erasing
some of the gains after the U.S. employment data was released.
                                
 U.S. employers cut 345,000 jobs in May, the fewest since
September and far less than forecast, according to the Labor
Department. [ID:nN04486858]
                                
 However, the overall employment rate still rose to the
highest in almost 26 years at 9.4 percent, muddying the picture
of economic recovery.
                                
Japanese stocks rose to an eight-month high on Monday after
smalller than expected U.S. job losses suggested a recovery is
under way. [MKTS/GLOB]
                                
Investors will likely focus this week on a deluge of Chinese
economic data <ECONCN> for further clues on the economic
outlook, and to see whether the doubling in oil prices from the
low $30s hit this winter is fed by fundamentals or by optimism
only.
                                
 The increase has come despite rising crude stockpiles and
amid few signs that the world economy will turn around
dramatically any time soon, industry officials told a Reuters
Global Energy Summit last week. [ID:nN0518973]
                                
 Speculators have trimmed the number of net long positions
on crude on the New York Mercantile Exchange to 39,687 during
the week to June 2, down from 40,122 in the week to May 26,
according to date from the U.S. Commodity Futures Trading
Commission released last Friday. [ID:nN05298566]
 (Editing by Michael Urquhart)