(Recasts after U.S. payrolls data, updates prices)
By Santosh Menon
LONDON, Feb 1 (Reuters) - Oil fell towards $91 a barrel on
Friday after weak U.S. jobs data triggered fresh concerns of a
recession in the world's top oil consumer, despite support from
an OPEC decision not to raise oil production.
U.S. employers unexpectedly cut 17,000 non-farm jobs last
month, the first time in nearly 4-1/2 years, providing further
evidence of a slowing economy. []
The news hit U.S. and European stocks and sent the U.S.
dollar sharply lower, dragging with them oil prices which had
rallied after OPEC's decision to keep output levels steady and
on rising stock markets. []
U.S. light crude for March delivery <CLc1> lost 65 cents to
to $91.10 a barrel by 1400 GMT, off highs of $92.12.
London Brent crude <LCOc1> was 67 cents down at $91.54.
OPEC ministers meeting in Vienna once again rejected calls
from consumer countries to pump more oil amid worries that high
fuel prices are adding to recessionary pressures in the West.
[]
The decision was widely expected, with a chorus of ministers
reiterating ahead of the meeting that the oil market was well
supplied, and a small group -- Iran and Venezuela -- even
calling for a production cut at their next gathering on March 5.
Analysts said OPEC appeared keen not to repeat its
experience of 1997 when it boosted supplies ahead of an economic
slowdown and prices collapsed to $10 a barrel.
"I absolutely expect them to consider cutting output in
March... To me the only question is will it be a formal cut
or...just cut informally," said Mike Wittner, oil analyst at
Societe Generale.
"A lot depends of the price itself. If prices drop another
$10 it's easier for them to have a formal cut."
Simon Wardell, analyst at Global Insight said OPEC could
decide next month to cut output by as much as 750,000 barrels
per day from April 1.
U.S. RECESSION
OPEC's decision comes as concerns mount the United States is
headed for a recession after a slew of recent economic data
pointed to a deteriorating economy. A major U.S. recession could
impact the world economy and with it oil demand and prices.
"OPEC will not see their roles as defending economic growth
but as that of providing a stable flow of oil at a fair price,"
said Robin Batchelor, managing director at BlackRock Merrill
Lynch Investment Managers.
A gloomy outlook for the U.S. economy has sent many
speculative investors, who helped propel oil's rally above $100
a barrel last month, into safer havens.
Business activity in the U.S. Midwest expanded in January
but at a slightly slower rate than expected, as new orders
dropped and price pressures accelerated, a report showed on
Thursday.
Additionally, the number of U.S. workers filing new claims
for jobless aid surged last week to the highest since October
2005, and consumer spending softened at the end of last year,
government data showed.
The U.S. Federal Reserve has sought to ward off a recession
by a series of interest rate cuts. It has cut rates by 125 basis
points in two tranches in the last nine days.
(Additional reporting by Felicia Loo in Singapore; editing by
James Jukwey)
