UPDATE 7-Oil seesaws as US job growth offsets budget deadlock

Fri Dec 7, 2012 4:14pm EST

Related Topics

* November U.S. jobs growth beats expectations
    * Republican leader Boehner says no progress in budget talks
    * Consumer confidence weakens in early December
    * China data expected to show growth recovery, support oil

 (Updates prices, adds details)
    By David Sheppard
    NEW YORK, Dec 7 (Reuters) - Oil prices were little changed
on Friday after data showing U.S. job growth offset statements
by U.S. Republican lawmaker John Boehner indicating deadlock in
talks to avert a U.S. budget crisis. 
    London-traded Brent crude settled 1 cent lower on
the day at $107.02 per barrel, bringing weekly losses for the
global benchmark crude to nearly 4 percent. U.S. crude 
settled down 33 cents at $85.93. Both benchmarks had traded in
positive territory earlier on Friday. 
    U.S. Labor Department data on Friday morning showed that
nonfarm payrolls rose by a larger-than-expected 146,000 in
November, against analyst expectations for slower job growth in
a Reuters poll. The U.S. unemployment rate fell to a four-year
low of 7.7 percent. 
    House of Representatives Speaker John Boehner said that
there was "no progress to report" in budget talks with the
administration of President Barack Obama as the two sides try to
hash out a budget deal to avoid the tax increases and spending
cuts which would be triggered automatically in the new year if
agreement is not reached. 
    A separate report showed U.S. consumer confidence has
plummeted to its lowest level since August. The Thomson
Reuters/University of Michigan's preliminary confidence reading
fell to 74.5 from 82.7 a month earlier. 
    "Oil got a boost from the jobs numbers, but the consumer
confidence pulled us back some and now traders will have to
decide if they want to be short going into the weekend with the
situation in the Middle East still so volatile," said Phil
Flynn, analyst at Price Futures Group in Chicago. 
    Protests surged around Egypt's presidential palace on Friday
as opposition groups opposed President Mohamed Mursi's recent
decree that expanded his powers, after clashes resulted in
several deaths this week. 
    
    NEARING THE CLIFF
    With about three weeks left before the so-called "fiscal
cliff" deadline in the United States, Boehner told reporters
that President Obama was taking a "my way or the highway"
approach to negotiations. 
    The economic fallout from the "fiscal cliff," which some say
could send the U.S. economy back into recession, could hamper
oil demand in the world's biggest consuming country.   
    Meanwhile, U.S. Federal Reserve policymakers are scheduled
to meet Dec. 11-12 to review monetary policy. OPEC ministers
will meet on Wednesday, though analysts do not expect the group
of oil exporting countries to alter output policy.
    Oil traders will also be watching Chinese data due on Sunday
that may show the pace of growth quickened in the country's
factory output, investment and retail sales during November,
thanks to recent pro-growth policies. 
    More gloomy economic forecasts from the euro zone could help
to keep downward pressure on oil prices. 
    The central banks of Germany and Austria on Friday forecast
anaemic economic growth in 2013, with the German Bundesbank
citing the risks of a recession, a day after the European
Central Bank cut its own forecasts for the euro zone region.
 
    The U.S. dollar gained against a basket of foreign
currencies after Friday's jobs data, on speculation the
U.S. Federal Reserve may need to adopt fewer stimulus measures
which can weaken the greenback. 
    A stronger dollar often leads to weaker prices for
dollar-denominated commodities like oil.
    Economic worries on both sides of the Atlantic have curbed
investor appetite for riskier assets, putting the  Thomson
Reuters-Jefferies CRB index, a bellwether for
commodities, in negative territory so far this quarter.
    U.S. heating oil futures  slid on Friday, but
gasoline futures gained 0.4 percent to around $2.607 per
gallon in New York.
    

 (Reporting by Robert Gibbons, David Sheppard and Joshua
Schneyer in New York; additional reporting by Alex Lawler in
London and Ramya Venugopal in Singapore; editing by Sofina
Mirza-Reid and Jim Marshall)
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