Oil prices ease on economic concern

LONDON (Reuters)  -- Oil eased further below $70 a barrel Monday, extending the previous session's losses, pressured by concern over the pace of U.S. economic recovery and any revival in energy demand.

Crude fell more than 1% Friday as doubts over a recovery resurfaced after data showed U.S. employers cut 263,000 jobs in September and the employment rate had soared to a 26-year high.

"With U.S. macro numbers taking a turn for the worst, the path of least resistance in a variety of energy complexes will be lower over the coming weeks," said Edward Meir, analyst at MF Global.

"Along with energy's uninspiring fundamentals, the complex has to also keep a wary eye on a faltering U.S. equity market and the fact that two key geopolitical "props" -- Iran and Nigeria -- seem to be fading in terms of importance."

U.S. crude for November slipped 36 cents to $69.59 a barrel.

The dollar weakened against a basket of currencies and European equities edged higher.

Attention will focus later on the Institute for Supply Management services index due at 10 a.m. ET.

The U.S. service sector is thought to have been on the verge of growth in September after 11 months of contraction, according to a Reuters poll of economists.

Oil gained nearly 6% last week, bolstered by a surprise drop in U.S. gasoline inventories as well as tensions between key oil exporter Iran and the West over Tehran's nuclear work.

Still, prices are likely to lose some support after Iran and the U.S. described recent talks as productive and with Iran allowing United Nations inspectors into a uranium enrichment plant.

In a further easing of geopolitical tension, the last prominent Nigerian militant leader agreed to halt fighting in the oil-producing Niger Delta and surrendered his weapons on Sunday.

Oil hit a 2009 high of $75 in August and analysts say prices are unlikely to break above $75 until energy demand worldwide starts to show more convincing signs of a rebound.