Oil Prices Fall After Spike Above 70 Dollars

NEW YORK: Oil prices retreated Friday after a brief spike that pushed New York crude above 70 dollars per barrel for the first time in seven months, before the market settled back on a US dollar rebound.

New York's main futures contract, light sweet crude for delivery in July closed at 68.44 dollars, down 34 cents, after a jump to 70.32 dollars a barrel, the highest level since November 4.

Brent North Sea crude for July delivery fell 37 cents to 68.34 dollars a barrel in London, having spiked as high as 69.91 dollars.

Analysts said that a surprise rise in the US dollar after a mostly positive American jobs report dragged down oil prices.

The dollar, often regarded as a safe haven in times of economic turmoil, has been dropping on data showing signs of economic recovery.

John Kilduff of MF Global said the market had to cope with "a very strong rally of the dollar which should have engendered losses for crude oil," but that reaction was muddled by a mixed report on US employment.

Kilduff said that after 70 dollars was breached, "we've seen a terrific amount of profit taking."

The US Labor Department said Friday the jobless rate surged to 9.4 percent in May, while the number of job losses slowed to a better-than-expected 345,000.

The report, seen as one of the best indicators of economic momentum, offered conflicting signals about a weak labor market, but suggested that the pace of massive job cuts is easing, a positive sign for a recession-battered economy.

Oil prices have experienced a roller-coaster week in reaction to movements in the dollar, US inventory data and predictions made about crude futures.

A struggling US currency makes dollar-priced crude cheaper for buyers holding stronger currencies, in turn stimulating demand and pushing up prices.

This news publsihed by www.thearynews.com