By Barani Krishnan
NEW YORK (Reuters) - Oil prices rose 3 percent on Friday as a report showing weaker U.S. jobs growth in August suppressed the dollar, pushing up commodities, but crude futures remained on track for a big weekly loss on glut concerns.
U.S. employment growth eased more than expected last month after two straight months of robust gains and wage gains moderated, casting doubts the Federal Reserve Open Market Committee will raise interest rates at its Sept. 20-21 meeting.
The dollar index weakened after the jobs report, making oil and other greenback-denominated commodities more affordable for holders of the euro and other currencies. [FRX/]The U.S. oil rig count rose by just one this week, after being unchanged last week, data from oil services company Baker Hughes showed, as crude prices hold below the key $50-a-barrel mark that analysts and drillers say makes drilling more viable. [RIG/U]
"Notwithstanding today's dollar-driven rally, September is usually a weak time for oil with demand coming off the peak summer period. So if the rig count stays steady, we could finish the year at about $50," said Jay Hatfield of New York-based InfraCap MLP, an exchange-traded fund that invests in U.S. energy projects.
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Brent crude futures were up $1.45, or 3.2 percent, at $46.90 a barrel by 1:47 p.m. EDT (1747 GMT). Brent was down 6 percent on the week, on track for its biggest weekly loss since late July.
U.S. West Texas Intermediate futures gained $1.37 cents, also 3.2 percent, to $44.53. WTI was on course to lose slightly more than 7 percent, its most since early July.
"With the FOMC likely to stay in September and the dollar dictating where we could go, it's quite likely oil will hold at mid-$40 levels," Carl Larry of New York energy consultancy, Frost & Sullivan, said, adding that OPEC action in coming weeks would also be key.
The weak dollar aside, oil rose on Friday partly on comments by Russian President Vladimir Putin who told a Bloomberg interview that he supported OPEC's attempts to implement an output freeze with other oil producers.
The Organization of the Petroleum Exporting Countries, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between Sept. 26 and 28 to discuss a freeze output.
If OPEC fails to strike a deal in Algeria, it is expected to try more action to prop the market its policy meeting in Vienna on Nov. 30.
Many analysts remain skeptical that it will be successful.
"The oil price will remain volatile over the coming weeks," said Hans van Cleef, senior oil economist at ABN Amro.
(Additional reporting by Karolin Schaps in LONDON and Florence Tan in SINGAPORE; Editing by Marguerita Choy and Jeffrey Benkoe)
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