* Market eyes U.S. jobs data for direction
* Few U.S. jobs seen lost in Oct, jobless rate seen
up-survey
* U.S. dollar steady ahead of October jobs report
(Updates prices)
By Fayen Wong
PERTH, Nov 6 (Reuters) - Oil prices rose slightly on
Friday, supported by positive U.S. economic data, but wariness
ahead of monthly jobs data from the United States limited gains
and kept prices below the psychologically key $80 level.
Despite data showing jobless claims in the U.S. fell to a
10-month low last week and non-farm productivity rose at its
fastest pace in six years in the third-quarter, oil prices fell
nearly 1 percent on Thursday as high fuel inventories in the
United States raised worries about a recovery in oil demand.
U.S. crude for December delivery crept up 32 cents to
$79.94 a barrel by 0742 GMT, after shedding 78 cents to settle
at $79.62 on Thursday.
London Brent crude <LCOc1> rose 44 cents to $78.43.
The labour market is being closely watched as analysts try
to gauge the strength and durability of a government
stimulus-driven recovery that started in the third quarter and
probably ended the worst U.S. recession since the 1930s.
"There's not much news in the market. Traders are still
looking to the U.S. unemployment report for directions," said
Clarence Chu, a trader at Hudson Capital Energy in Singapore.
U.S. employers in October are expected to have cut payrolls
by the smallest amount in 14 months as the economy's resumption
of growth boosted optimism, but the jobless rate still rose to
a fresh 26-year high of 9.9 percent in October, a Reuters
survey predicts. []
A higher-than-expected jobless rate or a bigger loss of
jobs than forecast could rattle investors on Wall Street and
the energy complex, and send them fleeing into the safe haven
of U.S. government bonds and the U.S. dollar.
Oil prices are set to gain 3.8 percent this week, clawing
back some of the previous week's 4.4 percent losses, thanks to
a series of solid economic data that have helped investors
regain some confidence about the pace of the economic recovery.
However, analysts said most of the economic optimism has
already been priced in and persistently sluggish energy demand
in the United States, the world's largest energy consumer,
could limit oil's gains.
Weekly inventory data on Wednesday showed that U.S.
distillate stocks -- often taken as a more faithful snapshot of
demand than crude oil -- fell 400,000 barrels compared to
analyst expectations for a 1 million-barrel decline. They
remain near 26-year highs and analysts said this would cap
price rises in the event of a cold winter.
"The deluge of global liquidity has contributed to lifting
oil prices since February. With the end of easing approaching,
we envision a harder grind ahead -- one where fundamentals will
matter more," Morgan Stanley said on Friday in a research note
led by energy analyst Hussein Allidina.
"We think upside in crude will be rather limited as
supportive macro factors start to fade and physical markets
remain weak."
Separately, the U.S. dollar held steady on Friday with
investors consolidating positions ahead of October non-farm
payrolls data due later in the session. []
(Editing by Clarence Fernandez)
