Oil prices fell to near $88 a barrel Friday as investors awaited a key jobs report later in the day for evidence about the strength of the U.S. economy.
By early afternoon in Europe, benchmark oil for October delivery was down 73 cents to $88.20 in electronic trading on the New York Mercantile Exchange. Crude rose 12 cents to settle at $88.93 on Thursday.
In London, Brent crude for October delivery was down 48 cents at $113.87 on the ICE Futures exchange.
Crude was bolstered by signs industrial production in the U.S. continues to expand. The Institute for Supply Management said Thursday that U.S. manufacturing grew for the 25th straight month while analysts had expected a contraction.
Investors will be closely watching the latest data later Friday from the Labor Department on the U.S. jobs market. Analysts are expecting employers added 93,000 jobs last month.
"Non-farm payrolls report will likely determine how the oil complex finishes this week," energy consultant Ritterbusch and Associates said in a report. "The flow of economic data during the past week or so has been encouraging and has contributed to the upswing in both the equities and the oil market."
Crude has jumped about 16 percent since August 9.
Developing storms in the Gulf of Mexico -- which led to the temporary closure of several oil platforms -- offered limited support for oil prices, as analysts said "storm-to-be Lee" did not yet pose a substantial threat.
"Forecasts for maximum winds of between 50 and 60 mph for to-be Lee are not enough to make us lose sleep over the weekend," said Oliver Jakob at Petromatrix in Switzerland.
In other Nymex trading for October contracts, heating oil fell 0.84 cent at $3.0434 per gallon and gasoline futures dropped 2.02 cents at $2.8725 per gallon. Natural gas for October delivery slid 2.6 cents to $4.024 per 1,000 cubic feet.
