UPDATE 8-Oil dips as weak global economy offsets rise in US jobs

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

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

* Turkey-Syria violence keeps supply concerns in play

* Coming up: CFTC positions data, 3:30 p.m. EDT Friday

(Recasts, updates prices, market activity; changes byline and dateline, previous LONDON)

By Robert Gibbons

NEW YORK, Oct 5 (Reuters) - Oil prices fell on Friday and headed for a weekly loss as a fragile global economy and uncertainty about Europe's debt crisis countered any support from a better-than-expected U.S. employment report.

The U.S. unemployment rate unexpectedly fell to 7.8 percent in September, its lowest level since January 2009 and against economist expectations it would rise, Labor Department figures showed.

The report showed nonfarm payrolls rose by 114,000 last month, just above expectations and up from 96,000 added in August. Some analysts and brokers expressed skepticism about the data, which could help President Barack Obama's reelection bid.

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

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

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

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

Brent November crude was down $1.73 at $110.85 a barrel on Friday, having moved from $110.54 to $113.05.

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

U.S. November crude was down $2.54 a barrel at $89.17, back below the 100-day moving average of $89.91, and having dropped as low as $89.09.

Equities on Wall Street extended gains and the Dow Jones industrial average hit its highest level in almost five years after the release of the U.S. payrolls report.

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


Crude oil prices have received support, or have had losses limited, by fears about potential threats to supply, especially in the Middle East as the Syrian civil conflict drags on and Iran continues to quarrel with the West.

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

Erdogan's speech highlighted the danger that the uprising against Syria's president, Bashar al-Asaad, will drag in its neighbors.

(Additional reporting by Alice Baghdjian in London and Ramya Venugopal in Singapore; Editing by Dale Hudson)

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

Keywords: MARKETS OIL/