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Oil below USD110 on strong dollar

Friday, March 08 16:50:08

Brent crude oil futures fell below $110 a barrel today, pressured by a stronger dollar after positive U.S. data, higher-than-expected supply from the North Sea and OPEC, and investors selling out of commodities in favour of equities.

Brent futures were down $1.44 to $109.71 a barrel at 1406 GMT. Brent is down for the fourth consecutive week, its longest weekly losing streak since May 2012.

U.S. oil was down 49 cents to $91.07, after ending more than a $1 higher in the previous session on an unexpected drop in U.S. unemployment benefits.

Traders and analysts said a stronger dollar had undermined oil prices after Friday's U.S. non-farm payrolls smashed expectations. The closely-followed figures surged by 236,000 jobs in February, easily beating economists' expectations for a gain of 160,000.

At 1407 GMT the dollar was up 0.86 percent against a basket of currencies. A stronger dollar makes commodities priced in dollars more expensive for buyers using other currencies.

"The employment report showed solid gains," said John Kilduff, a partner at Again Capital in New York. "It appears good enough to further the equity market rally and the dollar. Perversely, the strengthening dollar will limit gains in crude oil, due to the inverse correlation." Reuters