Oil Settles Below $78 After Weak US Jobs Report

Oil prices fell nearly 3 percent on Friday after data showed the U.S. jobless rate jumped to a 26-1/2-year high of 10.2 percent in October, raising concerns about a potential rebound in fuel demand.

The Labor Department said employers cut 190,000 jobs in October. That was more than the 175,000 markets had expected but fewer than the 219,000 lost in September.

Energy markets have been watching economic data for signs of recovery from the recession that slammed fuel consumption.

U.S. light, sweet crude fell $2.19 to settle at $77.43.

London Brent crude also fell.

"Crude and products futures pulled back sharply after the release of the October U.S. unemployment report," Addison Armstrong, analyst at Tradition Energy in Stamford, Connecticut, said in a research note.

On Wednesday the Federal Reserve said it had left official rates on hold, laying out conditions for any change based on improving employment, among other factors.

U.S. energy companies said operations were normal in and around the Gulf of Mexico as they monitored weather systems that could pass by offshore platforms and coastal facilities over the next several days.

Tropical depression Ida could move into the northwest Caribbean on Saturday where it was expected to become a tropical storm again, with forecasters predicting it could reach the Gulf of Mexico early Monday.

Another unnamed system could deliver high winds in the U.S. Gulf Coast area over the weekend.

The United States has a large number of oil and natural gas producing rigs in the Gulf of Mexico and a high concentration of refineries along the Gulf Coast which can face disruptions due to hurricanes.

Oil prices have risen from below $33 a barrel last December to a high for this year of $82 in October.

They were on course to gain nearly 4 percent this week, but market sentiment had been cautious following inventory data earlier in the week showing oil stocks at record supply levels.

Inventories of distillates, which include heating oil and diesel are near their highest levels in 26 years.

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