* Dollar index surges past 80 on Europe's fiscal woes
* Market awaits U.S. non-farm payrolls for economy
direction
* Traders say hedge fund may have contributed to price drop
By Alejandro Barbajosa
SINGAPORE, Feb 5 (Reuters) - Oil was steady near $73 on
Friday, near lows for the year after its biggest one-day drop
since July in the previous session, as the dollar jumped to its
highest against the euro in eight months.
The dollar index, a measure of the greenback's performance
against six major currencies, topped 80, its highest in seven
months, as concern deepened about worsening fiscal problems in
south European countries. []
The concern is that key U.S. non-farm payrolls number out
later in the day will continue to show rising unemployment in
the world's largest economy, especially after an unexpected
rise in U.S. jobless claims. []
U.S. crude oil for March delivery <CLc1> fell as much as 33
cents to $72.81 a barrel, but recovered to be up 16 cents at
$73.30 at 0322 GMT. On Thursday it touched a 2010 intraday low
of $72.42 and closed down 5 percent.
London ICE Brent for March <LCOc1> fell 4 cents to $72.09.
"The crisis in Europe, Greece, Portugal, Spain is going to
put downward pressure on the euro until they are able to sort
it out and confidence returns," said Clarence Chu, an energy
trader at Hudson Capital Energy in Singapore.
"But I'm not surprised that crude is down this much,
especially because of the rally a few days ago. To me it's not
really crazy. What gets people suspicious is when things are
different than expected."
On Tuesday prices posted their biggest daily percentage
gain in four months, climbing 3.8 percent. They are still about
50 percent lower than records above $147 in July 2008, having
shed about $11 from a 15-month high close to $84 on Jan. 11.
ECONOMIC CONCERNS
The strength of the U.S. economy, and hence oil demand, is
still a major factor for the market. U.S. non-farm payrolls are
expected to be flat in January, after firms slashed thousands
of jobs in December. []
Investors sold off stocks in Portugal, Spain and Greece and
the euro plunged on Thursday as market fears over the fiscal
problems of debt-laden southern members of the euro zone
widened.
The head of the International Monetary Fund called for
painful steps to cut huge fiscal deficits across Europe, saying
no country should be under the illusion it was possible to
escape the financial crisis without paying the cost.
[]
Concerns about the economy pushed gold to its single
largest daily fall since 2008 on Thursday while the Dow Jones
Industrial Average briefly fell below the crucial 10,000 mark
as stocks suffered their worst losses in more than nine months.
[] []
Traders and brokers at several firms said they suspected
the sell-off in crude was also linked to a hedge fund quickly
unloading a big oil position. []
A sudden rush of volume in front-month New York Mercantile
Exchange (NYMEX) crude oil futures trading during the final
moments of open-outcry trading on Wednesday was followed
Thursday by the fifth-highest trading volume on record for the
contract at nearly 500,000 lots.
For NYMEX crude oil prices and trading volumes click:
http://graphics.thomsonreuters.com/gfx/JLeff_20100402174217.jpg
"If my fund had cash trouble and I needed the money, I
would sell whatever I can," Chu said.
"It's definitely possible that we'll test oil's lows for
the year, especially if the employment number disappoints," Chu
said.
(Editing by Michael Urquhart)
