Oil falls below $70 ahead of US employment data

Oil falls below $70 ahead of US employment data

London: Oil fell below $70 a barrel on Friday due to concerns about the strength of the US economy ahead of key employment data, while tensions between the West and Iran over the Opec member’s nuclear plan eased.

However, oil remains on course to post its biggest weekly percentage gain in more than a month, as investors eye an eventual resurgence in energy demand.

US crude futures were down $1.01 to $69.81 a barrel by 0812 GMT, after climbing 21 cents on Thursday and by more than $3 since Monday.

London Brent crude lost 96 cents to $68.23.

“There is a bit of caution over the US economic data which has been softer than expected," said Mark Pervan, senior commodity strategist at ANZ in Melbourne, adding that oil demand remained weak between the end of the US driving season and the start of winter.

The US manufacturing sector lagged expectations in September and the number of workers seeking jobless benefits rose last week, countering data that showed consumer spending rose at its fastest in almost eight years in August.

The US dollar kept broad gains on Friday as investors booked profits in higher-yielding currencies ahead of a US non-farm payrolls report for September at 1330 GMT, with expectations for a further 180,000 job losses.

A stronger greenback tends to pressure dollar-priced commodities, as they become more expensive for other currency holders.

Traders and analysts said talks between six major powers and Iran — the second largest oil exporter in the Organization of the Petroleum Exporting Countries (Opec) — over Tehran’s nuclear programme could pressure prices further on Friday.

Both the US and Iran described Thursday’s talks as productive, after Iran agreed to allow UN inspectors into a newly disclosed uranium enrichment plant.

“We thought the meeting got off to a good start, and thus find crude oil’s higher finish on Thursday to be somewhat puzzling," MF Global analyst Edward Meir said in a research note.

“We suspect the current weakening we are seeing will hold sway more decisively in Friday’s session."