Brent slips below $112 ahead of US jobs data

Strains in the Middle East escalated this week after Turkey stepped up its strikes against Syria and won parliamentary approval for further military action, pushing Brent prices up 4 percent on Thursday.

That ended a three-day slide for the crude benchmark, when a spate of weak data earlier in the week reinforced concerns that the fragile global economic recovery is still under threat with a turnaround in China expected to be delayed and the euro zone almost certainly heading into recession.

Keeping investors on edge is jobs data from the United States later on Friday, which may provide further clues on the economic health of the world's biggest oil consumer.

"The softness we're seeing could be a combination of profit-booking and nervousness ahead of the non-farm payrolls data," said Ben le Brun, a market analyst with OptionsXpress in Sydney.

"Tensions in the Middle East will keep a floor under prices and the news flow is not improving."

Front-month Brent futures had dropped 62 cents to $111.96 per barrel by 0423 GMT, poised to end the week little changed.

U.S. crude futures eased 32 cents to $91.39 per barrel, after climbing nearly 4 percent in the prior session. They were down 0.9 percent on the week, their third-straight weekly fall.

Oil's steep gains on Thursday were also supported by a jump in U.S. gasoline futures after a fire at the largest operating refinery in the country triggered supply worries especially after data showed product inventory shrank last week.

FIRST TEST

Crude futures dropped between 3-4 percent in a single session mid-week after two purchasing manager surveys showed that a recovery in China, the world's second-biggest oil consumer, may be delayed.

The euro zone's service sector has declined even further and factory activity is at a more than three-year low, potentially pushing the debt-hit region into a recession.

Data from the U.S. this week suggested a nascent recovery, and investors are seeking further confirmation from the non-farm payrolls data due later in the day.

The United States likely added 113,000 jobs in September, up from 96,000 in August, with the unemployment rate edging up to 8.2 percent, according to a Reuters survey.

The data will be the first test of whether the Federal Reserve's strategy to buy $40 billion in bonds every month from September to boost the labor market has started to bear any fruit.

"A bad non-farm payroll number would only likely have a negative impact on equity and commodities prices," said Jason Schenker, president of research firm Prestige Economics.

"It is unlikely the Fed would act significantly in the wake of having done so much at the September meeting."

TENSIONS SUPPORT

While the gloomy global economy has hurt the outlook for fuel demand, oil prices are getting support from festering tensions in the Middle East.

An 18-month old conflict in Syria escalated this week, after Turkey stepped up its cross-border strikes against its neighbor to retaliate against shelling that killed five Turkish civilians.

The news amplified oil supply concerns after Iran's exports dropped following sanctions from the U.S. and European Union on the Middle Eastern nation's oil shipments.

An increase in rhetoric by Iran, the U.S. and Israel over Tehran's disputed nuclear program is also adding to the nervousness of the already jittery investor community.

The European Union is drawing up plans to also ban Iranian gas imports, in its latest move to ratchet up pressure on the country, sources said.

Elsewhere, OPEC member Venezuela will go to polls this weekend, with the outcome closely watched by oil markets.

"Venezuela's capability to develop its petroleum resources both in the short and long term holds significant implications for the evolution of world oil supplies," J.P. Morgan analysts said in a report.

"As such, the country's presidential election this weekend could mark a substantive pivot point for both domestic and world markets."

(Editing by Manolo Serapio Jr. and Joseph Radford)