UPDATE 10-Oil dips as weak global economy offsets rise in US jobs

* Brent premium to U.S. crude hits highest since Oct 2011

* U.S. jobless rate falls to near four-year low

* Supportive U.S. data offset by weak China, Europe reports

* Coming up: API oil stocks data 4:30 p.m. EDT Tuesday

(Adds details, paragraphs 13, 15-17, 19-20)

By Robert Gibbons

NEW YORK, Oct 5 (Reuters) - Oil prices fell in volatiletrading on Friday and posted weekly losses as a fragile globaleconomy and uncertainty about Europe's debt crisis offsetsupport from a better-than-expected U.S. employment report.

While U.S. crude retreated 2 percent, North Sea cargo delaysand sensitivity to threats of disruptions to Middle East supplylimited Brent crude futures' losses and pushed Brent's premium

to U.S. crude to its highest since October 2011.

The U.S. unemployment rate unexpectedly fell to 7.8 percentin September, its lowest level since January 2009 and againsteconomist expectations it would rise.

The report showed nonfarm payrolls rose by 114,000 lastmonth, just above expectations and up from 96,000 added inAugust. Some analysts and brokers expressed scepticism about thedata, which could help President Barack Obama's reelection bid.

The jobs snapshot added to supportive U.S. reports onprivate-sector job gains and manufacturing released this week,but the numbers have not been enough to counter a more gloomymanufacturing and service-sector picture in Europe and China.

"I don't really believe the jobs data, many oil tradersdon't, and there is a feeling that if prices get too high theSPR (Strategic Petroleum Reserve) will be released before theelection," said Richard Ilczyszyn, chief market strategist andfounder of iitrader.com in Chicago.

Ilczyszyn added that the oil market is well supplied andthat the strong refined products futures market has been liftedby refinery and supply issues.

Addressing doubts about the validity of the latestunemployment figures, U.S. Labor Secretary Hilda Solis said onCNBC television that the idea that the report was manipulated is"ludicrous."

Brent and U.S. crude shot up 4 percent on Thursday, but therally only offset a slide of similar percentages the previoussession.

Brent November crude fell 56 cents to settle at$112.02 a barrel on Friday, recovering after falling to $110.54.For the week, Brent slipped 37 cents, or 0.33 percent.

Brent fell back below the 50-day moving average of $112.38and the 200-day moving average of $112.12, technical levelsclosely monitored by chart-watching traders.

U.S. November crude fell $1.83 to settle at $89.88,back below the 100-day moving average of $89.91, and havingdropped as low as $89.01.

Crude trading volumes were above 30-day averages for Brentand U.S. crude.

Brent's premium to U.S. crude increased to$22.14 based on settlements.

Tim Evans, an analyst at Citi Futures Perspective in NewYork, said there was an emerging seasonal pattern in the Brentand U.S. crude spread as North Sea maintenance coincides withrefinery turnarounds in the U.S. Midwest at the start of thefourth quarter.

Only two of the 16 cargoes of North Sea Forties crude oildue to load in October have retained their original dates, tradeand shipping sources said on Friday, as almost the entireschedule is deferred due to lower-than-expected production.

The Forties stream is fed by the Buzzard field, Britain'sbiggest.

U.S. RBOB gasoline futures managed a nearly pennygain on Friday, settling at $2.9525 a gallon, up 0.96 cent. U.S.heating oil , the benchmark distillate futures contract,fell 3.25 cents to settle at $3.1559 a gallon.

Refined products futures were lifted on Thursday by news ofa fire on Wednesday at Exxon Mobil's 560,500 barrel-per-dayBaytown, Texas refinery, the largest U.S. operating refinery.

Exxon Mobil Corp said Friday it was still assessingdamage to the Baytown, Texas, diesel hydrotreater hit by fire onWednesday and output remains reduced.

The S&P 500 index broke a four-day string of gains, easingfrom a five-year high reached after the jobs report, as traderstook profits ahead of corporate earnings reports start arrivingnext week.


Crude oil prices have received support, or have had losseslimited, by fears about potential threats to supply, especiallyin the Middle East as the Syrian civil conflict drags on and asIran's dispute with the West over Tehran's nuclear programpersists.

Turkish Prime Minister Tayyip Erdogan said on Friday hiscountry was "not interested in war (with Syria), but not farfrom it either" following cross-border attacks this week.

Erdogan's speech highlighted the danger that the uprisingagainst Syria's president, Bashar al-Asaad, will drag in itsneighbors.

(Additional reporting by Alice Baghdjian in London and RamyaVenugopal in Singapore; Editing by Dale Hudson, Alden Bentleyand Leslie Gevirtz)

((robert.gibbons@thomsonreuters.com)(+1 646 223 6059)(ReutersMessaging: robert.gibbons.reuters.com@reuters.net))

Keywords: MARKETS OIL/