Business

Oil prices fall as strong jobs report pushes up dollar

NEW YORK: The benchmark US oil price fell Friday to the lowest level in more than five years,  hit by a stronger dollar after a blockbuster US jobs report for November.

Global prices were already under pressure from OPEC’s recent decision to leave output unchanged despite ample supplies and from Saudi Arabia’s price cuts for oil exported to Asia and the United States.

West Texas Intermediate for December delivery dropped 97 cents to $65.84 a barrel on the New York Mercantile Exchange. It was the lowest close since July 29, 2009, when WTI fell to $62.90.

The international benchmark, Brent North Sea crude for delivery in January, settled at $69.07 a barrel in London trade, down 57 cents from Thursday.

The US economy added a huge 321,000 jobs in November, the best job growth in nearly three years, the Labor Department reported. Upward revisions to the prior two months added 44,000 jobs and brought the yearly average to 241,000 a month.

The dollar pushed higher, climbing to $1.2282 per euro and 121.52 yen.

Citi Futures analyst Tim Evans noted that the greenback’s strength came on an upward trend over the past five months. A stronger dollar tends to make crude more expensive for buyers using weaker currencies.

“The positivity of the decent job creation is being offset in the crude market by headwinds from a pop higher in the US dollar,” said Matt Smith of Schneider Electric.

According to analysts, crude oil, which has lost about 40 percent of its value since June, also suffered from some technical factors Friday.

Carl Larry of Frost & Sullivan said that many investors were reshuffling their portfolios before the end of the year and when they saw that oil prices had not benefited from strong jobs data in the US, the biggest consumer of crude oil, they decided it was time to sell. (AFP)

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