| GEO Business|
| Oil prices drop as dollar rise nips rally|
| Updated at: 0414 PST, Saturday, August 08, 2009|
NEW YORK: Oil prices declined Friday as a stronger dollar muted the impact of better-than-expected jobs data in the United States, the world's biggest energy-consuming nation.
New York's main contract, light sweet crude for September, shed 1.01 dollars to 70.93 dollars a barrel, after hitting a five-week high of 72.42 dollars on Thursday.
London's Brent North Sea crude for delivery in September slipped 1.24 dollars to 73.59 dollars a barrel, after touching 76.00 dollars on Thursday, its highest level for 10 months.
Analysts said prices fell when the dollar climbed against key currencies in reaction to data showing US job losses slowing amid tentative signs of a recovery in the world's biggest economy.
Oil is priced in the US currency and becomes more expensive when the dollar rises.
But the surge in the dollar Friday in reaction to the positive US jobs data surprised some as the currency has mostly been regarded as a safe haven unit often rising when economic data dampened hopes of recovery from recession.
"Oil prices have fallen victim to a rising dollar," said Antoine Halff of Newedge Group.
Prices enjoyed a brief rally Friday after data showed the unemployment rate fell to 9.4 percent in July as job losses in the month narrowed to 247,000.
The data was better than expected as most private economists had forecast a loss of 325,000 jobs and a jobless rate rising to 9.6 percent from the June level of 9.5 percent.
But oil analysts cautioned against reading too much on the fresh job data.
"The economy is still mired in a deep recession and recovery will be a long process. However, the slowing rate of job loss is undeniably encouraging. To focus on the bigger picture though will require standing back from any one set of data," said John Kilduff of MF Global.