* Oil rebounds in gasoline-led rally
* Concerns about Iran nuclear programme weigh on market
* U.S. non-farm job losses smaller than feared
(Recasts, updates prices, adds U.S. jobs data)
By Santosh Menon
LONDON, Aug 1 (Reuters) - Oil rebounded above $128 a barrel
in volatile trading on Friday, led by a surge in U.S. gasoline
futures which offset early worries about sluggish economic
growth in the world's top energy consumer.
U.S. light crude for September delivery <CLc1> rose $2.75 to
$126.83 a barrel by 1500 GMT, off highs of $128.60. It had
dropped to as low as $122.10 on top of a $2.69 fall in the
previous session.
London Brent crude <LCOc1> rose $2.07 to $126.05 a barrel.
"It seems to be gasoline-led," said Jim Ritterbusch,
President of Ritterbusch & Associates in Illinois, as U.S.
gasoline prices <RBc1> surged more than 4 percent, leading the
entire oil complex higher.
U.S. crude fell nearly $2 earlier on Friday, extending its
decline from the previous session on weak U.S. economic data
that showed weaker-than-expected economic growth and a sizeable
increase in jobless claims amid high energy prices.
The market also took heart from smaller-than-feared job
losses in the United States. The U.S. labor department said
51,000 non-farm jobs were eliminated in July, fewer than the
75,000 forecast by economists.
Oil has fallen from a record above $147 a barrel hit on July
11, the peak of a six-year rally set in motion by an Asian
economic boom. Oil's 11.4 percent loss for the month of July
marked the biggest monthly decline in percentage terms since
December 2004.
Moody's Economy.com economist Matt Robinson said he expected
crude oil prices to continue drifting lower, averaging around
$110 a barrel in the fourth quarter.
The Reuters-Jefferies CRB Index <.CRB>, an index of 19
commodity futures with a bias towards energy products such as
crude oil and natural gas, saw its biggest decline in 28 years
in July. The index lost 10 percent during the month, the
steepest drop since it fell 10.5 percent in March 1980.
But market concerns about OPEC member and the world's fourth
biggest oil exporter Iran, which remains locked in a tense
standoff with the West over its nuclear programme, and supply
disruptions in Nigeria have offered some support to oil prices.
Iran has a weekend deadline to respond to an offer made by
major powers to hold off imposing more sanctions in exchange for
freezing any expansion of its nuclear work. []
Nigeria's crude oil production fell by 150,000 barrels per
day after Monday's militant attack on a major pipeline in the
Niger Delta, an official with state-run oil company NNPC said on
Friday.
This week's rebel attacks in Nigeria added to a string of
bombings that has disrupted the OPEC nation's production.
(Additional reporting by Felicia Loo in Singapore, Editing by
James Jukwey)
