Oil fell for the first time in four days on speculation that the shutdown of refineries on the U.S. East Coast because of Hurricane Sandy will add to already ample stockpiles.

Futures headed for a third weekly drop as Phillips 66 and Hess Corp. (HES)’s New Jersey refineries remain shut four days after the storm struck. Crude inventories exceed 370 million barrels, the most for October in at least 10 years.

Oil also fell as U.S. stocks erased gains and the euro slipped to a three-week low against the dollar after a report showing that hiring in the U.S. rose more than forecast in October.

The euro dropped as much as 0.8 percent to $1.2837 after the Labor Department figures showed an improving U.S. employment picture. A stronger dollar and weaker euro reduce oil’s appeal as an investment alternative.

In the last jobs report before next week’s election, a net 171,000 workers were added to payrolls after a 148,000 gain in September that was more than first estimated. An advance of 125,000 was expected. The jobless rate rose to 7.9 percent from 7.8 percent as more people entered the labor force, the figures showed.

Crude oil for December delivery fell to $85.03 a barrel on the New York Mercantile Exchange. Prices are down 0.6 percent this week and 13 percent this year.

Brent oil for December settlement slid 37 cents to $107.80 a barrel on the London-based ICE Futures Europe exchange.

Gold futures headed for the biggest drop in almost four months to below $1,700 an ounce as U.S. payrolls in October rose more than forecast, easing pressure on the Federal Reserve to expand monetary stimulus.

A Labor Department report showed a net 171,000 workers were hired after a 148,000 gain in September that was more than estimated.

In addition, in September, factory orders in the U.S. slowed growth, but exceeded forecasts. Orders excluding defense and aircraft industry increased by 0.2% compared to 0.3% in August, while in July, the indicator has fallen by 5.6%, as the Commerce Department said today in Washington. The overall rate increased by 4.8%. Economists had expected a gain of 4.6%.

Importers of gold in India - the world's largest consumer of the precious metal - increasing their purchases at the height of the holiday season, which will culminate in November during festivals Diwali and Dhanteras.

Gold mining company AngloGold Ashanti on Friday suspended the work of one of the mines in South Africa because of the strike, and the world's largest gold producer, Barrick Gold Corp reported a sharp drop in profit in the third quarter.

Gold futures for December delivery tumbled to 1679.90 dollars per ounce on COMEX today.

Change % Change Last

Oil $86.97 -0.12 -0.14%

Gold $1,716.20 +0.70 +0.04%