Crude oil futures - weekly outlook: December 8 - 12

Investing.com - Oil futures declined again on Friday to end near the lowest level in five years as a broadly stronger U.S. dollar combined with indications Saudi Arabia lowered prices to buyers in the U.S. and Asia weighed.

On the ICE Futures Exchange in London, Brent for January delivery hit a session low of $68.10 a barrel, before settling at $69.07, down 57 cents, or 0.82%.

London-traded Brent futures slumped to $67.57 a barrel on December 1, the weakest level since October 2009.

On the week, the January Brent contract lost $1.08, or 1.53%, the second consecutive weekly decline.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in January tumbled 97 cents, or 1.45%, on Friday to end the week at $65.84 a barrel.

Nymex oil futures hit $63.72 on December 1, a level not seen since July 2009.

For the week, New York-traded oil futures fell 31 cents, or 0.46%, the second straight weekly loss.

The spread between the Brent and the WTI crude contracts stood at $3.23 a barrel by close of trade on Friday, compared to $4.00 in the preceding week.

The U.S. dollar rallied after the Department of Labor said that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.

October’s figure was revised up to 243,000 from a previously reported 214,000, while the unemployment rate remained unchanged at a six-year low of 5.8%.

The US dollar index, which measures the greenback against a basket of six major currencies, hit a peak of 89.50, the strongest level since March 2009 and ended the day up 0.82% to 89.39.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

Meanwhile, Saudi Arabia’s state-run oil company lowered official selling prices for its crude in January to the lowest in at least 14 years for buyers in the U.S. and Asia, it announced on Thursday.

The move suggested that the kingdom is stepping up a battle for market share with cheaper U.S. shale oil after last week's OPEC decision to keep production quotas unchanged.

London-traded Brent prices have fallen nearly 40% since June, when it climbed near $116, while WTI futures are down almost 39% from a recent peak of $107.50 in June.

The Organization of Petroleum Exporting Countries said on November 27 that it would keep its official production target unchanged at 30 million barrels a day, disappointing hopes the oil cartel would lower output to support the market.

The 12-member group is responsible for approximately 40% of global supply.

In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.

China is to produce what will be closely watched reports on trade, consumer prices and industrial production in the week ahead.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.