Oil prices retreat on concern over U.S. job market

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Oil prices dropped Monday as disappointing data sparked concerns about weak jobs growth in the United States.

Last Friday, the report from Labor Department showed that the U. S. non-farm sector added fewer jobs than expected in July.

Total non-farm payroll employment added 162,000 in July, well below the market's expectation of 175,000. The unemployment rate edged down to 7.4 percent. However, analysts believed that the July's jobless rate fell mainly due to more people have given up to seek jobs.

The news of Libyan production will increase oil output also weighed on the oil prices. Libyan Oil Minister Abdulbari Al-Arusi said at a press conference in Tripoli that the country should pump 800,000 barrels a day next month from a current 700,000.

On the economic front of the U.S., the service sector expanded at a faster pace in July. The non-manufacturing index jumped to 56. 0 from June's 52.2, according to the Instituted for Supply Management. Analysts polled by Bloomberg expected the index to rise to 53.0 in July.

Light, sweet crude for September delivery lost 38 cents to settle at 106.56 dollars a barrel on the New York Mercantile Exchange.

Brent for September delivery went down 25 cents to close at 108. 7 dollars a barrel.

• Oil prices rally on global growth optimism
• Oil prices rise on upbeat U.S. economic data
• China's factory jobs face pressure
• Jobless rate to be 'last straw' for policy direction
• Employment outlook weakens for H2

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