By Peter Nurse
Investing.com -- Oil prices fell Friday after strong U.S. jobs data boosted the dollar but are still set to post a positive week ahead of the weekend's OPEC+ meeting and the start of an EU ban on Russian crude imports.
By 09:15 ET (14:15 GMT), U.S. crude futures traded 0.5% lower at $80.83 a barrel, while the Brent contract fell 0.6% to $86.32.
Data released Friday also showed that the U.S. labor market remained strong in November, as job creation held up despite increasing signs of layoffs across the economy.
Nonfarm employment grew by 263,000 through the middle of the month, well above the 200,000 consensus forecast. October's number was also revised up by 23,000 to show a gain of 284,000.
This helped the dollar gain as traders reassessed the likelihood of the U.S. Federal Reserve continuing to aggressively tighten monetary policy, given the resilience of the jobs market.
The US Dollar Index, which tracks the greenback against a basket of six other currencies, rose 0.4% to 105.148, after earlier falling to its lowest level since August. A stronger dollar makes crude, which is denominated in the U.S. currency, more expensive for foreign buyers.
That said, both crude benchmarks were on track for their first weekly gains - the biggest in two months at around 5.5% and 3%, respectively - after three consecutive weeks of decline.
Behind a lot of the week's gains has been optimism that China, the largest importer of crude in the world, is moving towards lifting its extremely tight mobility restrictions as it battles COVID cases near record levels.
Several cities have already begun lifting their lockdowns after a series of violent protests over the strict curbs, potentially boosting the country's economic activity and thus the demand for crude.
Attention in the crude market is now turning to the weekend's meeting of the Organization of Petroleum Exporting Countries and allies, known as OPEC+.
The group is widely expected to stick to the stance announced last month of reducing oil production by 2 million barrels per day, but a degree of uncertainty still exists over the decision.
"Preliminary OPEC production numbers for November are starting to come through and it is no surprise that the group significantly reduced output over the month due to the recently agreed production cuts," said analysts at ING, in a note, with OPEC output declining by just over a million barrels a day month-on-month, according to a Bloomberg survey.
"The group meets on Sunday and given the recent price weakness, there is the potential for further cuts."
Adding to the uncertainty is the news that the European Union is close to a deal to cap the price of Russian oil exports at $60 a barrel. An EU ban on Russian oil imports into the block also comes into force on Monday.
The price cap would stop third parties from getting essential services such as shipping and insurance from European companies if the buyer pays a higher price for cargoes of Russian crude.
A deal at $60 a barrel "is still above the current levels that Russia is receiving for its crude oil. Therefore, if agreed at this level, it will have little impact on Russian oil revenues at the moment," ING added.