Crude Oil Ends At 5-Year Low As Dollar Strengthens

(RTTNews) - U.S. crude oil dropped sharply to end at a five-year low on Friday, extending previous session's fall after Saudi Arabia slashed prices for its U.S. and Asian customers.

Oil prices firmed on news of some solid U.S. jobs data for November, but surrendered much of the gains as the dollar rallied to multi-year highs on the news.

Concerns over a supply glut continue to plague markets after the Organization of Petroleum Exporting Countries decided not to lower its oil production, even as U.S. shale oil production strengthened. Saudi Arabia slashed its prices for export to the U.S. and Asia yesterday in an effort to stave off the threat from U.S. shale oil producers and maintain its market share.

In some upbeat data from the U.S., a Labor Department report on Friday showed employment increased much more than anticipated in November, even as job growth for the two previous months were also revised upward. Unemployment rate remained unchanged as expected.

However, there were a couple of disappointing reports, with new orders for U.S. manufactured goods dropping more than expected in October, reflecting a sharp drop in non-durable goods orders.

Meanwhile, U.S. trade deficit narrowed in October with exports rising more than imports, but still came in much wider than economists anticipated, a Commerce Department report said Friday.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, declined $0.97 or 1.5 percent to close at $65.84 a barrel on the New York Mercantile Exchange Friday.

Crude prices for January delivery scaled a high of $66.89 a barrel intraday and a low of $65.17.

On Thursday, crude oil futures ended at at $66.81 a barrel, down $0.57 or 0.8 percent, after Saudi Arabia trimmed prices for the U.S. and Asian markets, even as some bigger than expected decline in U.S. crude stockpiles last week limited oil's losses. Some upbeat U.S. economic data, including a report showing a larger than expected decline in initial jobless claims also supported oil.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 89.31 on Friday, up from its previous close of 88.60 late Thursday in North American trade. The dollar scaled a high of 89.47 intraday - the highest level since March 2009, and a low of 88.58.

The euro trended lower against the dollar at $1.2291 on Friday, as compared to its previous close of $1.2379 late Thursday in North American trade. The euro scaled a high of $1.2392 intraday and a low of $1.2272.

In economic news from the U.S., the economy added 321,000 jobs in November, the biggest addition in nearly three years, beating forecast for an increase of 230,000. Meanwhile, the unemployment rate remained unchanged at 5.8 percent for the month, in line with expectations.

The report also said average hourly employee earnings climbed by 9 cents to $24.66 in November, with two soft reading previously. Nevertheless, the 12-month growth just about inched up to 2.1 percent from 2.0 percent.

Loretta Mester, president of the Cleveland Fed, reacting to the strong jobs data said the Federal Reserve will not overreact to November's blockbuster job report. "As the economy continues to improve, as we've seen, then I would think we would be raising rates sometime in 2015," Mester observed.

Data released by the Commerce Department showed U.S. trade deficit to have narrowed less than expected to $43.4 billion in October from $43.6 billion in September.

In economic news from eurozone, German factory orders were up by a seasonally adjusted 2.5 percent in October. following a 1.1 percent gain in September.

In economic news from eurozone, a report from Eurostat said the euro area GDP grew 0.2 percent sequentially in the third quarter following a 0.1 percent rise in the prior quarter.

Growth in global emerging markets slowed further in November, a survey from Markit Economics showed Friday. The HSBC Emerging Markets Index fell to 51.2 in November from 51.5 in October. However, the EMI remained well below its long-run trend level of 53.7 and 2014 looks set to record the lowest annual average for the index since its inception in November 2005.