* U.S. June nonfarm payrolls drop, pressure oil
* Prices head for biggest weekly drop since early May
* Coming up: CFTC positions report at 3:30 p.m. EDT
(Recasts, updates prices, market activity)
By Robert Gibbons
NEW YORK, July 2 (Reuters) - Crude oil prices fell on
Friday, slumping a fifth straight session as bearish US job
data stoked fears of a double dip recession.
U.S. crude oil futures <CLc1> fell $1.18, or 1.62 percent,
to $71.77 a barrel by 1:50 p.m. EDT (1750 GMT). The $71.62
intraday low was the weakest since prices fell to $70.75 on
June 8.
ICE Brent crude oil futures <LCOc1> fell $1.03 to $71.31.
Oil prices seesawed initially after the Labor Department
reported that U.S. nonfarm payrolls fell 125,000 in June, more
than expected and the first decline of 2010, but with the
unemployment rate falling to 9.5 percent, from 9.7 percent in
May. []
Adding to the anxiety about the economy, the government
later reported U.S. factory products orders fell more than
expected in May, the first decline in nine months and the
steepest drop since March 2009. []
Front-month U.S crude has fallen every day this week and is
on course for a slide of 7 percent on the week, its biggest
weekly drop in percentage terms since early May, when the
European debt crisis hit markets and prompted a 13 percent
drop.
Private sector jobs rose 83,000, less than forecast but
more than May's 33,000 tepid rise. Jobs were expected to have
fallen 110,000, according to a Reuters survey.
"With all the gloom and doom before the report you could
say it wasn't as bad as it could have been, but it's probably
not a positive for the economy and that's the way the crude
market is looking at it right now," said Robert Yawger, senior
vice president, energy futures at MF Global in New York.
"Demand could get hit a bit," he added.
The weak U.S. dollar helped limit the initial decline after
the employment numbers. The dollar slipped against the euro,
extending Thursday's steep losses. The dollar index <.DXY> fell
0.26 percent.
U.S. stocks tumbled and were on track to record their worst
week in two months after the jobs data underscored views the
recovery is losing steam. [] The S&P 500 index <.SPX> fell
0.72 percent.
Trading sources also noted lighter trading volume ahead of
the U.S. Independence Day holiday weekend as a factor in the
choppy trading, with volume for U.S. front-month crude only
nearing 203,000 in afternoon trading in New York.
(Graphic: http://link.reuters.com/gyp55m)
Oil fell more than 3 percent on Thursday, its biggest
one-day slide in nearly four weeks, as weak manufacturing data
from China and the United States fueled mounting worry that the
global economic recovery could stall and even slip back into
recession.
(Additional reporting by Gene Ramos in New York, Alejandro
Barbajosa in Singapore and Ikuko Kurahone in London; Editing by
Sofina Mirza-Reid)
