Oil prices dip on caution ahead of U.S. jobs data

By Keith Wallis

SINGAPORE (Reuters) - Oil prices fell almost 1.5 percent on Friday, as investors turned cautious ahead of U.S. jobs data that is expected to play into the Federal Reserve's decision on the timing of any U.S. rate hike.

Oil stuck to a narrow range and trading was thin with Chinese markets closed a second day for a holiday to commemorate the end of World War Two.

"There's been a little bit of up and down and range-bound movement, which has all the hallmarks of a market marking time," said Ben Le Brun, market analyst at Sydney's OptionsXpress.

Brent crude for October delivery fell 75 cents to $49.93 a barrel as of 0654 GMT, after ending the previous session 18 cents higher. Brent rose as high as $50.87 a barrel earlier in the session on Friday

U.S. crude for October delivery, also known as West Texas Intermediate, was down 67 cents at $46.08 a barrel, off the day's high of $46.85. It settled up 50 cents on Thursday.

"If nonfarm payrolls turn out better, oil prices could increase as there would be more bullishness on the U.S. economy," said Phillips Futures in a note on Friday.

A weak payroll figure could push prices down, causing the WTI and Brent benchmarks to test support at $44.92 and $49.69, respectively, the note added.

U.S. policymakers are likely to use the August jobs data, due for release at 1230 GMT, as part of their assessment on whether to hike rates this year at the next meeting of the U.S. Federal Reserve federal open market committee on Sept. 16-17.

A strong dollar remained a "clear and present danger" for the oil markets, Le Brun said, as it makes commodities priced in the greenback more expensive for holders of other currencies.

Investors are also keeping an eye on U.S. oil rig data due later on Friday for clues on supply. Any drop in rig numbers could bolster oil's price outlook.

Barclays on Friday followed BNP Paribas and cut its Brent price forecast to $52 for the second half of this year, and by $5 to $63 in 2016.

BNP Paribas cut its Brent price forecasts on Thursday to $56 per barrel from $62 for 2015 and to $62 from $76 for 2016. For WTI, it lowered 2015 outlook to $51 per barrel from $55 and its 2016 forecast to $56 from $70. {ID:nL1N1191H7]

Rosneft Chief Executive Igor Sechin on Friday said that Russia can increase oil production up to 700 million tonnes per year (14 million barrels per day) and export 300 billion cubic metres of gas to China a year.

(Reporting by Keith Wallis; Editing by Himani Sarkar and Subhranshu Sahu)