* 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 edged up on Friday after
its biggest one day fall since July the previous day, as
intervention by the Swiss National Bank to buy euros pared
dollar gains.
The dollar index, a measure of the greenback's performance
against six major currencies, had earlier touched its highest
in seven months as concern deepened about worsening fiscal
problems in south European countries. []
But sentiment remains fragile ahead of key U.S. non-farm
payrolls number out later in the day, which could show
unemployment continuing to rise in the world's largest economy,
especially after an unexpected increase in U.S. jobless claims.
[]
U.S. crude oil for March delivery <CLc1> gained 24 cents to
$73.38 a barrel at 0523 GMT. On Thursday it touched a 2010
intraday low of $72.42 and closed down 5 percent.
London ICE Brent for March <LCOc1> rose 8 cents to $72.21.
"The dollar has weakened a bit from before and people tend
to look to the dollar for guidance," said Clarence Chu, an
energy trader at Hudson Capital Energy in Singapore.
"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."
The euro leapt against the Swiss franc on Friday following
the Swiss intervention, after earlier plunging to a 15-month
low against the franc and tumbling to its lowest level in more
than eight months against the dollar. []
Investors sold off stocks in Portugal, Spain and Greece 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.
[]
Oils losses on Thursday came after the futures posted their
biggest daily percentage gain in four months on Thursday, up
3.8 percent. But they are still about 50 percent lower than the
record above $147 in July 2008, having shed about $11 from a
15-month high close to $84 on Jan. 11.
Traders and brokers at several firms said they suspected
Thursday's 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)
