* Oil slips further after fall of nearly 4 pct
* Rising U.S., euro zone job losses hit recovery hopes
* JP Morgan sees risk of price fall to $60
(Updates throughout)
By Alex Lawler and Barbara Lewis
LONDON, July 3 (Reuters) - Oil fell towards $66 a barrel on
Friday, adding to a drop of nearly 4 percent the previous day,
as unemployment data hardened views economic weakness would sap
energy demand further and that last month's rally was overdone.
In the latest sign the economy of the world's top consumer
was still struggling, data on Thursday showed U.S. employers cut
467,000 jobs in June and the jobless rate rose to a 26-year
high. Euro zone unemployment climbed to a 10-year high.
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"All the data was bad yesterday," said Rob Montefusco, a
trader at Sucden Financial. "Technically, it looks pretty weak
at the moment."
U.S. crude <CLc1> was down 56 cents at $66.17 a barrel by
1511 GMT. London Brent crude <LCOc1> fell 65 cents to $66.00.
Friday's trading volumes were thin as NYMEX floor trading
was closed for the U.S. Independence Day holiday.
Oil prices have doubled from a low of $32.40 a barrel in
December last year and they surged by 42 percent in the last
quarter -- the largest quarterly gain since 1990.
But some analysts had predicted the market's rise above $70
in June could not be sustained as the economy and energy demand
were still weak and oil inventories remain high.
The latest U.S. government data showed a bigger than
expected increase in stocks of motor fuel ahead of the July 4
holiday weekend, typically a time of high demand as the peak of
the U.S. summer driving season. []
JP Morgan said in a report on Friday it expected oil prices
to correct to about $60 a barrel or lower.
Technical analysts, who use past price moves to predict
price direction, were also taking a bearish view for the
immediate term.
"Risks are shifting for a downside correction toward $60 in
the weeks ahead before the larger bull trend resumes," Barclays
Capital technical analysts said.
For the longer term, many forecasters and analysts have said
there was a risk of a supply crunch that could drive prices much
higher, following under-investment in new capacity during the
current period of lower oil prices and limited credit.
The Organization of the Petroleum Exporting Countries has
said prices needed to be around $75 to spur investment and it
has lowered its output targets by 4.2 million barrels per day
since last September to try to support the market.
OPEC's higher level of discipline earlier this year
surprised analysts. Earlier this year, it rose to a peak of
around 80 percent of promised curbs, but as oil markets have
recovered the group's compliance has faltered.
Reuters latest survey pegged discipline at 72 percent, still
far above the historical average of 60 percent. []
(Additional reporting by Barbara Lewis in London and Fayen
Wong in Perth, Editing by Anthony Barker)
