Oil falls 3 percent on discouraging jobs report

Oil is falling after the government reported Friday that jobs growth in the U.S. stalled last month.

Benchmark crude $2.64, or 3 percent, to $86.30 after the Labor Department said employers stopped adding jobs in July. The unemployment rate remained at 9.1 percent.

The sagging jobs market raised concerns that the nation could slide back into recession and demand for oil and gasoline will decline.

Oil was also pushed down as the dollar rose against the euro and some other currencies. Oil is priced in dollars and becomes less attractive to buyers with foreign currency as the dollar get stronger.

Oil falls to near $88 ahead of key US jobs report

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.