PERTH - OIL prices fell below US$68 (S$97.60) a barrel on Monday on concerns that high unemployment in the United States, the world's top energy consumer, will weigh on demand.
But analysts said a weak US dollar, combined with a firm equities market, would help limit oil's decline.
US crude for October delivery fell 46 cents to US$67.56 a barrel by 2359 GMT. The contract settled 6 cents higher at US$68.02 a barrel on Friday.
London Brent crude fell 39 cents to US$66.43 a barrel.
'As the long Labour Day weeked comes to an end, we're looking at the end of peak gasoline demand season in the US, which means we're now entering a period of slack seasonal demand with refineries scaling back their production,' said Toby Hassall, a commodities analyst at CWA Global Markets in Sydney.
'High unemployment in the US also underscores the weakness we're seeing in the consumer sector, which will put a handbrake on the overall recovery in energy demand even as we see industrial demand recovering.'
The US Labour Department reported on Friday that the unemployment rate jumped to 9.7 per cent in August, despite fewer job losses than expected.
But Asian shares are likely to rise on Monday, tracking gains on Wall Street which rose as much as 1.8 per cent as investors focused on the bright side of the mixed payrolls report.
This week, traders will be watching for OPEC's output policy when it meets in Vienna on Wednesday, with most analysts expecting the producer group, the source of more than a third of the world's oil supply, to maintain its official output target to keep prices stable around US$70.
For a preview of the OPEC meeting, click on Investors will also eye the monthly release of Chinese economic data due on Friday, analysts said. -- REUTERS
