Oil edges higher ahead of U.S. jobs report

LOS ANGELES (MarketWatch) — Crude-oil futures ticked higher in electronic trade Friday, paring some of its earlier loss as the dollar edged downward, but with focus on the U.S. jobs report due later in the day.

The March contract for West Texas Intermediate oil CLH3 -0.16% added 8 cents or 0.1% to $97.57 a barrel, trimming a 45-cent drop during Thursday’s regular New York Mercantile Exchange session. Read: Oil prices fall, but see best January since 2006.

March futures for rival London-traded benchmark Brent North Sea crude UK:LCOH3 +0.16%  gained 26 cents, or 0.2%, to trade at $115.81 a barrel.

The gains came as the U.S. dollar moved lower during East Asian trading hours, with the ICE dollar index DXY -0.26%  slipping to 79.123, down modestly from 79.197 in late Thursday trade in North America.

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A cheaper dollar can push prices higher for dollar-denominated commodities such as crude oil, as it makes them cheaper for holders of other currencies, attracting buyers.

Earlier Friday, Nymex crude briefly rose, then fell back after the release of generally positive reports on China’s manufacturing sector.

Two rival surveys of Chinese manufacturing activity agreed that the sector improved last month, helped by a build-up in new orders, but they differed over the extent of that improvement. Read: China’s manufacturing improves, surveys show.

The moves for oil in Asia came ahead of the critical U.S. jobs report for January, due out at 8:30 a.m. Eastern time.

Economists surveyed by MarketWatch tipped the nonfarm payrolls to have expanded by 170,000 jobs, with the unemployment rate dropping to 7.7% from 7.8%.

Any large surprise to the downside has the potential to weigh on oil prices, while a stronger-than-expected result could prompt as rally. Read: U.S. job growth in January: more of same.

Meanwhile, prices showed little apparent reaction to news of an unexplained deadly explosion late Thursday at the Mexico City headquarters of state-owned oil firm Petroleos Mexicanos. Read: Unexplained blast at Mexico’s Pemex kills 25.

Among other energy futures, March natural gas NGH13 -0.99%  lost 3 cents, or 0.8%, to $3.31 per million British thermal units, while March gasoline RBH3 -0.39%  slipped fractionally to remain at $3.03 a gallon, and March heating oil HOH3 +0.03%  rose a cent or 0.2% to $3.12 a gallon.