Investing.com - A stronger-than-expected U.S. jobs report strengthened the dollar on Friday and sent crude prices dropping in a selloff exacerbated by concerns that global oil supply far exceeds demand.
A stronger greenback makes oil a less attractive commodity on dollar-denominated exchanges, especially in the eyes of investors holding other currencies.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in November traded down 1.15% at $89.96 a barrel during U.S. trading. New York-traded oil futures hit a session low of $89.38 a barrel and a high of $91.79 a barrel.
The November contract settled up 0.31% at $91.01 a barrel on Thursday.
Nymex oil futures were likely to find support at $88.18 a barrel, Thursday's low, and resistance at $94.64 a barrel, Monday's high.
The Department of Labor reported earlier that the U.S. economy added 248,000 jobs in September, far more than the expected 215,000 increase. The number of jobs created in August was revised to 180,000 from a previous estimate of 142,000.
In addition, the U.S. unemployment rate ticked down to 5.9% last month from 6.1% in August.
Analysts had expected the rate to remain unchanged, and the numbers boosted the dollar by cementing expectations for the Federal Reserve to close its monthly bond-buying program later this month and begin hiking interest rates in 2015, which sent oil prices heading south.
Elsewhere, the Institute of Supply Management said its non-manufacturing purchasing managers' index slipped to 58.6 in September from a reading of 59.6 in August. Analysts had expected the index to fall to 58.5 last month.
A separate report showed that the U.S. trade deficit narrowed to $40.10 billion in August from $40.30 billion in July, whose figure was revised from a previously estimated deficit of $40.60 billion.
Analysts had expected the trade deficit to widen to $40.90 billion in August.
Fears of a global supply glut pushed prices down as well.
Earlier this week, Saudi Arabia cut the prices of the oil it ships to Asia to remain competitive and retain its market share, which added to fears that supply far outstrips demand due in large part to slumping European and Asian economies.
Separately, on the ICE Futures Exchange in London, Brent oil futures for November delivery were down 1.28% at US$92.23 a barrel, while the spread between Brent and U.S. crude contracts stood at US$2.27 a barrel.