* Dollar strengthens, equities pare gains
* U.S. job cuts fewer than expected
* OPEC cautious about oversupply and fragile economy
(Updates prices at settlement)
By Edward McAllister
NEW YORK, Dec 4 (Reuters) - Oil prices fell nearly $1 to
below $76 a barrel on Friday, pressured by a stronger dollar
which outweighed better-than-expected U.S. jobs data.
U.S. crude futures <CLc1> fell 99 cents to settle at
$75.47. Brent crude <LCOc1> lost 84 cents to settle at $77.52.
The dollar jumped against the yen and the euro, making
dollar-denominated commodities like crude more expensive for
holders of other currencies, helping pressure prices.
"I think right now the big play is the dollar," said Rich
Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
"The question is whether we get a sustained rise in the dollar
... If you get that crude could go down to $70 or below."
Investors have been looking to economic data for signs of
global economic recovery and a potential rebound in energy
demand.
U.S. stocks sharply pared gains as the rising U.S. dollar
weighed on commodities and risk appetite ebbed. []
In earlier trading, crude rose to near $78 a barrel after
the U.S. Labor Department reported that employers cut only
11,000 jobs last month, the fewest in nearly two years. The
jobless rate edged down to 10 percent. []
But U.S. unemployment remains high and energy fundamentals
in the world's largest energy consumer are weak, keeping
analysts skeptical about crude's upside potential.
OPEC
Olivier Jakob with Petromatrix said high oil inventory
levels in the United States, especially at the delivery point
of U.S. crude at Cushing, Oklahoma, have been putting more
pressure on U.S. oil prices than on North Sea benchmark Brent
crude.
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For graphics of oil stocks at Cushing versus Brent/U.S.
crude spreads, see the link below.
http://graphics.thomsonreuters.com/129/CMD_OKL1209.gif
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Oversupply and the fragile state of the global economy will
be among the issues facing the Organization of the Petroleum
Exporting Countries when it meets on Dec 22. Analysts expect no
change in OPEC's output policy.
Saudi Arabian Oil Minister Ali al-Naimi told reporters in
Cairo that he was satisfied with the trading range of $70-$80
seen in recent weeks.
"Right now you see the price is ok between $70 and $80,
it's close to the target we set, it's almost $75 -- it's good,"
Naimi said, referring to the $75 level that he has said suited
producers and consumers. []
OPEC's Secretary-General Abdullah al-Badri told Reuters on
Thursday the group should be cautious as it needs to balance
signs of economic recovery and abundant supplies.
He said oil inventories remained above their five-year
average and there were 165 million barrels of crude and
products floating at sea, equal to almost two days' global
demand and more than some estimates.
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, Ikuko Kurahone in London and Nick Trevethan in Singapore;
Editing by Christian Wiessner)
((Edward.mcallister@thomsonreuters.com; +1 646 223 6221;
Reuters Messaging:edward.mcallister.reuters.com@reuters.net))
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