Oil prices steady in choppy trade; biggest weekly drop in Brent since Jan

By Barani Krishnan

NEW YORK, July 8 (Reuters) – Oil prices steadied in choppy trading on Friday, with Brent on track to its largest weekly drop in six months, as strong U.S. jobs data and bargain hunting by investors pitted against seasonally weak consumption of oil.

The oil market initially rose about 1 percent or more after the U.S. economy posted the largest job gains in eight months in June and on worries about fresh militant attacks on Nigerian oil infrastructure. But the gains faded after concerns over supplies later returned.

“It’s choppy and will likely stay so,” said David Thompson, executive vice-president at Washington-based commodities broker Powerhouse. “It’ll be a tug of war today between the very strong jobs numbers and the existing bearish oil market fundamentals.”

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The market will also be on the lookout for this week’s U.S. oil rig count from industry firm Baker Hughes at about 1:00 p.m. EDT (1700 GMT). U.S. drillers last week added oil rigs for a fourth week in five, in the best month of producers returning to the well pad since August that signaled a near-two year rout in drilling may have ended.

Brent crude futures were up 20 cents, or 0.4 percent, at $46.60 per barrel by 11:38 a.m. EDT (1538 GMT), after a session low at $46.15

U.S. crude’s West Texas Intermediate (WTI) futures rose by 15 cents to $45.29 versus a drop earlier to $44.77.

Both benchmarks were down nearly 8 percent for the week – the largest weekly slide for Brent since January.

Crude futures remain some 75 percent above 12-year lows of $27 for Brent and $26 for WTI hit in the first quarter. But the market has gyrated since hitting above $50 as a glut of refined products replaced worries about crude oversupplies that caused a near two-year long tumble earlier.

Futures hit two-month lows on Thursday, with WTI breaking below key support of $45.83 after weekly drawdowns in U.S crude looked inadequate to assuage investor concerns.

“I think we have strong support at $44 for WTI now. Some of the gloom and doom on demand destruction for oil has gone away with the U.S. jobs numbers,” said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.

(Additional reporting by Libby George in LONDON and Henning Gloystein in SINGAPORE; Editing by David Goodman and Marguerita Choy)