SINGAPORE (Reuters) - Oil fell below $68 a barrel on Monday after a stronger U.S. dollar and profit-taking prompted a retreat from a seven-month high above $70 hit last week.
The dollar edged slightly down on Monday, after posting its largest one-day gain in more than five months on Friday on data showing the pace of U.S. job losses slowed sharply in May, prompting fears of an earlier-than-expected rise in U.S. interest rates.
A stronger dollar makes commodities such as oil, which is denominated in the currency, look more expensive to holders of other currencies.
U.S. light crude for July delivery fell 48 cents a barrel to $67.96 by 0437 GMT, off an intraday low of $67.78, having settled 37 cents lower on Friday at $68.44.
London Brent crude was down 49 cents at $67.85 a barrel.
"We could see more strength in the dollar this week and a short-term correction and consolidation in the commodities complex. It also looks like there is some technical resistance at $70," said Toby Hassall, head of research for Commodity Warrants Australia.
U.S. futures rose to $70.32 a barrel on Friday, a seven-month high for the front-month contract, before erasing some of the gains after the U.S. employment data was released.
U.S. employers cut 345,000 jobs in May, the fewest since September and far less than forecast, according to the Labor Department.
However, the overall employment rate still rose to the highest in almost 26 years at 9.4 percent, muddying the picture of economic recovery.
Japanese stocks rose to an eight-month high on Monday after smaller than expected U.S. job losses suggested a recovery is under way.
Investors will likely focus this week on a deluge of Chinese economic data for further clues on the economic outlook, and to see whether the doubling in oil prices from the low $30s hit this winter is fed by fundamentals or by optimism only.
The increase has come despite rising crude stockpiles and amid few signs that the world economy will turn around dramatically any time soon, industry officials told a Reuters Global Energy Summit last week.
Speculators have trimmed the number of net long positions on crude on the New York Mercantile Exchange to 39,687 during the week to June 2, down from 40,122 in the week to May 26, according to date from the U.S. Commodity Futures Trading Commission released last Friday.
