Oil falls, heads for biggest weekly loss on record

By @ibtimes on

Oil fell on Friday, on track for the biggest weekly drop in dollar terms ever, following a torrid 10 percent crash in the previous session.

Oil erased early gains and turned negative in late afternoon trade as the dollar rose, extending Thursday's shock-inducing collapse, when Brent fell as much as $12, a record, in a furious, high-volume session that saw waves of selling as key technical levels were broken.

I think the dollar rally is driving sellers back into the market, said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

Selling pressure on oil and other commodities came on several fronts this week, with investors weighing factors from the death of Osama bin Laden to the impact of higher fuel and commodity costs on the economies of consumer nations to monetary policy in major economies.

Brent crude fell $1.37 to $109.43 a barrel by 2:56 p.m. EDT in heavy trade, with volumes twice the 30-day moving average. The contract was down $16.25 a barrel for the week, on track for its largest weekly decline ever.

U.S. crude futures settled down $2.62 at $97.18 a barrel, after trading at $102.38 following the release of supportive U.S. jobs data. U.S. crude ended down $16.75 for the week, the biggest weekly drop since the contract began trading in 1983.

The euro fell to its lowest in more than two weeks on Friday and headed for its worst week against the dollar since January after a German news report, later denied, suggested Greece had raised the possibility of leaving the euro zone.

(Reporting by Gene Ramos, Robert Gibbons, Matthew Robinson in New York; Jessica Donati-Bourne in London and Francis Kan in Singapore; Editing by Dale Hudson)

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