Oil slips, glut puts it on track for sixth week lower

[August 07, 2015]  By Libby George

LONDON (Reuters) - Oil was on track for another weekly drop as oversupply concerns weighed on the world's oil benchmark, facing a sixth consecutive week of losses, the longest run since the turn of the year.

U.S. jobs data due later on Friday helped underpin U.S. WTI crude oil, but Brent slid as physical markets braced for the return of 2 million barrels of North Sea oil that turned back from its path to South Korea earlier this week.

"The market is very much in wait and see mode ahead of today's U.S. labor market data," said Kash Kamal, analyst with Sucden. "Investors are looking for any positive surprises."

Brent crude futures <LCOc1> were 25 cents lower at $49.27 at 1005 GMT (0605 EDT).

The global oil benchmark was on track to close the week more than 5 percent lower, the biggest weekly fall since March.

U.S. crude <CLc1> was flat at $44.66 a barrel at 1005 GMT (0605 EDT), after dropping more than 1 percent on Thursday when it hit a 4-1/2 month low.

"The flat price already made a big move," said Olivier Jakob, managing director of PetroMatrix. "Brent has been consolidating."

U.S. jobs data on Friday could give a strong pointer on when the Federal Reserve will raise interest rates for the first time in nearly 10 years. Markets are split between a hike next month or a delay until December.

The market is also awaiting Chinese trade figures over the weekend. Worrying data about the state of China's slowing economic growth, which has major implications for oil demand in the world's top energy consumer, has been a key factor driving the decline in oil prices in recent weeks.

But analysts said seasonal refinery maintenance over the coming months, and stock builds of key oil products such as distillates, also cast a worrying shadow on crude prices.

"There is indeed a growing risk that seasonally weaker crude demand over the fall maintenance period could lead to surprisingly strong stockbuilds, with even lower outright prices required to bring about a supply side adjustment," analysts JBC said in a note.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by William Hardy)

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