Oil edged down on Friday from a six-week high in the previous session, as markets awaited US July employment data later today, a major indicator of how well the US economy is doing pulling out of recession.
Oil prices are heading for a fourth straight week of gains as an improvement in the economic mood boosts riskier assets and knocks the dollar, but with high crude inventories showing demand remains weak, investors will want to see further signs that economic growth is returning.
US light crude for September delivery fell 32 cents a barrel to $71.62, having settled 3 cents down at $71.94 yesterday, when lower US stocks and a stronger dollar took prices off a six-week high of $72.42.
London Brent crude fell 27 cents to $74.56.
The US economy is expected to have lost 320,000 non-farm payroll jobs in July, a hefty number but still an improvement over last month's drop of 467,000, while the unemployment rate is expected to have risen to 9.6 per cent.
Data will be released at 12.30 Irish time.
A better-than-expected weekly US jobless claims report yesterday failed to dampen concerns about the July jobs report.
Oil has more than doubled since the low $30s of this winter, having plunged there from a record near $150 in July 2008, but prices have yet to retrace a 2009 high of $73.38 hit on June 30th as US inventories and crude in floating storage remain high.
US crude stocks rose by a larger-than-expected 1.7 million barrels last week, according to the Energy Information Administration, leaving them a hefty 54.3 million barrels above year-ago levels.
Frontline, the world's biggest independent oil tanker shipping group, said yesterday around 50 very large crude carriers (VLCCs) were storing crude oil, particularly in the US Gulf and off Europe, amounting to about 100 million barrels.
Risks to the oil market from increased regulation were given teeth on Thursday when the US Federal Trade Commission said it would fine traders and companies up to $1 million a day if they manipulate oil markets.