Oil Pushes Lower, Undeterred by Bullish Jobs Report
U.S. crude oil closed at its lowest since July 2009 on Friday as Brent averaged below $70 a barrel in the week for the first time since 2010, as strong U.S. employment data did little to lift the oil market's bearish mood.
Both contracts continued to slide as the market grappled with oversupply resulting from the U.S. shale boom and the recent decision by the Organization of the Petroleum Exporting Countries not to cut production.
Prices increased from lows earlier in the day after stronger-than-expected U.S. employment data. November nonfarm payrolls rose 321,000, the most since January 2012. Still, the market remained lackluster and subdued, traders said.
"We just had the best economic news come out for some time and the market went nowhere," said Carl Larry, director of business development consultant for oil and gas at Frost & Sullivan. "Traders, hedge funds, oil companies - they're saying that we might as well take some money off the table. Volumes are thin and choppy. Everyone is waiting for the weekend."
The January Brent crude contract slipped 57 cents to settle at $69.07 a barrel, while U.S. crude fell 97 cents to settle at $65.84 a barrel. Both registered their ninth loss in 10 weeks.
Oil prices were further exacerbated by a stronger dollar, as the dollar index hit a intraday high of 89.467, the highest since March 2009. A stronger dollar makes commodities denominated in the greenback less affordable to holders of other currencies.
Analysts said the Saudi cuts to monthly prices for crude it sells to the United States and Asia show it is stepping up its battle for market share.
"I feel like we're in the balance here," said Phil Flynn, an analyst at Price Futures Group in Chicago. "The Saudis' cutting their price is causing people to sell oil. And, the market is still weak."
The strength of U.S. economy, as evidenced by the employment data, contrasts with that of the euro zone, where Germany's Bundesbank this week halved its 2015 growth forecasts for Europe's largest economy to 1 percent.
(Additional reporting by Libby George and Ahmed Aboulenein in London, Florence Tan and Manolo Serapio Jr. in Singapore; Editing by Steve Orlofsky; Editing by Jason Neely, Mark Potter, Jessica Resnick-Ault, David Gregorio and Marguerita Choy)