* Worries over U.S. economic data cast shadow over oil
* Dollar rebound dampens oil's recovery
* Iran nuclear concerns persist but impact seen limited (Updates prices, adds milestone in third paragraph)
By Ramthan Hussain
SINGAPORE, Oct 2 Oil fell towards $70 a barrel on Friday, driven lower by the dollar's recovery and concerns over U.S. employment data, while worries over the West's talks with Iran about the OPEC member's nuclear plan eased.
The U.S. dollar kept broad gains as investors cut short positions and booked profits in higher-yielding currencies ahead of a U.S. payrolls report for September, which is expected to give more downbeat signals on the jobs scene.
U.S. crude futures CLc1 dropped 76 cents to $70.06 a barrel by 0659 GMT, after rising 21 cents on Thursday and more than $3 since Monday for its best weekly percentage gain in six weeks. London Brent crude LCOc1 lost 72 cents to $68.47 a barrel.
"There is a bit of caution over the U.S. economic data which has been softer than expected, and China is on holidays," said Mark Pervan, senior commodity strategist at ANZ in Melbourne, adding that demand remained weak between the end of the U.S. driving season and start of winter.
"On Iran, there has not been a major impact on the markets, and if at all, it is holding up oil prices from going lower," he said.
Both the U.S. and Iran described talks as productive, after Iran agreed to allow U.N. inspectors into a newly disclosed uranium enrichment plant. [ID:nLU404202]
Lacklustre economic data in the U.S. and Japan continues to cast a shadow over the pace of recovery and on demand for oil in the world's top two economies.
The big number out on Friday is U.S. non-farm payrolls for September, with expectations that the pace of job losses will slow to 180,000 from 216,000 in August. [ID:nN2890914]
This came after U.S. manufacturing sector in September lagged expectations and the number of workers seeking jobless benefits rose last week, countering data that showed consumer spending rose at its fastest in almost eight years in August. [ID:nN01395512]
The economic uncertainty led to gains in the U.S. dollar, with the euro touching a three-week low of $1.4502 EUR= and the commodities-linked Australian dollar off 14-month peaks at $0.8693 AUD=D4. [USD/] (Editing by Michael Urquhart)
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