* U.S. payrolls fell by 263,000 in September
* Geopolitical tension fades as Iran engages on nuclear
issue
* Eyes on U.S. ISM manufacturing data due later Monday
(Updates prices)
By Fayen Wong
PERTH, Oct 5 (Reuters) - Oil was little changed at just
below $70 on Monday, pausing from the previous session's
losses, as concerns about a halting U.S. economic recovery and
sluggish energy demand continued to cast a pall on crude
prices.
Oil prices fell more than 1 percent on Friday as doubts
over an economic recovery resurfaced after data showed the U.S.
unemployment rate had soared to a 26-year high.
U.S. crude for November delivery <CLc1> inched up 8 cents
to $70.03 a barrel by 0702 GMT. The contract settled down 87
cents at $69.95 a barrel on Friday.
London Brent crude crept up 2 cents to $68.09.
"The market is cautious after the poor U.S. jobs data on
Friday. But the overall trend of an economic recovery hasn't
changed and I think investors are using such
weaker-than-expected data as an opportunity to take profits,"
said Ben Westmore, a commodities analyst at the National Bank
of Australia.
U.S. employers cut a deeper-than-expected 263,000 jobs in
September, lifting the unemployment rate to 9.8 percent, the
highest since June 1983. The Labor Department said payrolls had
now dropped for 21 consecutive months. []
Analysts said a further decline in the U.S. dollar could
lift oil prices, while all eyes will be the U.S. manufacturing
data for September due later on Monday.
The U.S. service sector is thought to have been on the
verge of growth in September after 11 months of contraction,
according to a Reuters' poll of economists. []
The U.S. dollar index <.DXY> fell 0.28 percent against a
basket of currencies to 76.79 points on Monday, amid
expectations that U.S. interest rates will stay near zero for
some time. []
With a thin economic calendar in the United States, the oil
price is likely to take its cue from equities markets, leading
some analysts to caution that it could hit more speed bumps
this week if the start of the third-quarter earnings season
provides little evidence the economic recovery is gaining
strength. []
Oil gained nearly 6 percent last week, largely bolstered by
a U.S. government report mid-week showing a surprise drop in
gasoline inventories as well as tensions between key oil
exporter Iran and the West over Tehran's nuclear programme.
However, analysts said, crude prices are likely to lose
some support from geopolitical tensions, after Iran and the
U.S. described recent talks as productive, with Iran allowing
inspectors from United Nations into a uranium enrichment plant.
[]
In Nigeria, the last prominent militant leader agreed to
halt fighting in the oil-producing Niger Delta and surrendered
his weapons on Sunday in return for an unconditional pardon.
[]
Crude prices are still trading in the $65-$75 range of seen
over the past two months and some analysts said prices are
unlikely to break out of the $75 mark until energy demand
worldwide start to show more convincing signs of a rebound.
The amount of crude oil held at sea on tankers is likely to
fall as consumption grows in the fourth quarter, the chief
executive of the world's biggest independent oil tanker group
Frontline <FRO.OL> said on Friday. []
Money managers cut net long crude oil positions on the New
York Mercantile Exchange in the week to Sept. 29, the Commodity
Futures Trading Commission said in a report on Friday.
[]
(Reporting by Fayen Wong; Editing by Clarence Fernandez)
