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NEW YORK - Oil prices were mixed Monday after fresh data showed that the US services sector grew in September for the first time in a year, raising recovery hopes in the world's biggest energy consuming nation.
New York's main contract, light sweet crude for November delivery, rose 46 cents to end at 70.41 dollars per barrel, recovering from heavy losses earlier.
London's Brent North Sea crude for delivery in November fell three cents to 68.04 dollars a barrel.
Prices rebounded after a survey by purchasing managers showed that the US services sector grew in September for the first time in a year, fueling optimism of economic recovery from a long recession.
The oil market tracked stocks, which also rebounded after four days of decline in reaction to the Institute of Supply Management's survey showing its non-manufacturing index rising to 50.9 percent from 48.4 percent in August. Any number above 50 percent indicates growth.
The index gain was larger than analysts' expectations of 50.0 percent.
"The market rallied on the back of good economic news, which offset some of the negative sentiment that happened on Friday," said Andy Lipow of Lipow Oil Associates.
Official data released last Friday showed US job losses accelerated to 263,000, sending the unemployment rate to a 26-year high of 9.8 percent in September.
The ISM's employment sub-index on Monday reflected ongoing job cuts but not as heavy as in prior months, rising 0.8 percentage point to 44.3 percent.
Services makes up the lion's share of US economic activity and employment, and is therefore critical to recovery from the long recession.
But analyst Phil Flynn at PFG Best cautioned that oil prices could remain under pressure.
"Jobs losses are mounting and oil supplies are rising. It is time to face facts. Recent economic data is undermining the bull's oil case," he said.
"Welcome to the jobless economic recovery that should reduce oil demand expectations even further as we look out into our future."
Another factor weighing on oil prices is the easing violence in oil rich Nigeria.
Three top Nigerian militant leaders in the volatile oil hub of the Niger Delta gave up their weapons along with thousands of fighters on Saturday under a government amnesty.
Among them was Government Ekpemupolo, popularly known as "Tompolo", who accepted the amnesty offer during a meeting with Nigerian President Umaru Yar'Adua late Saturday.
"Some of the recent geopolitical premium may erode as Tompolo, behind many attacks in the Niger Delta, handed over weapons," said Mike Fitzpatrick of MF Global.
But he cautioned that the main armed group MEND had warned that "unknown commanders" had replaced those who had accepted amnesty and that the next phase of its violent campaign would begin soon.
Iran's recent agreement to allow weapons inspectors access to a newly disclosed nuclear enrichment facility may also drain some support for prices, said Fitzpatrick.
- AFP /ls
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