Oil fell from six-week highs on Friday, pressured by gains in the dollar following the release of better-than-expected U.S. job-loss numbers.
U.S. employers cut 247,000 jobs in July, far less than expected and the least in any month since last August, according to a government report, adding to optimism that the world's largest economy was turning around.
The jobs report was a mixed bag for crude traders. On the one hand, it was good for fundamentals for people to be working and able to buy things, said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.
But it could mean that Europe will be seen as the lagging market and get people to short the euro, and a stronger dollar longer term, and put some pressure on commodities.
U.S. crude settled $1.01 lower at $70.93 a barrel, after touching a six-week high of $72.84 earlier. London Brent crude fell $1.24 to settle at $73.59 a barrel.
The drop came as the dollar gained against the euro and the yen, putting pressure on commodities denominated in the greenback. <.N> Wall Street gained following the release of the U.S. jobs data.
The economic crisis has damped fuel demand, pushing crude from record highs near $150 a barrel in July 2008 to below $33 a barrel in December.
Oil prices have found support from optimism that a potential turnaround in the economy could boost flagging fuel consumption, although global inventories of crude remain high, especially in top consumer the United States.
Several industry sources estimated that there were 70 million barrels of crude oil being stored at sea. While the estimates vary from around 60 million to 100 million barrels, most sources agree offshore storage levels rose by around 10 million barrels in the last two weeks alone.
(Reporting by Matthew Robinson, Robert Gibbons and Gene Ramos in New York; Christopher Baldwin in London; Maryelle Demongeot in Singapore; Editing by Marguerita Choy)