LONDON - Oil traded below $67 a barrel on Friday, after a fall of nearly 4 percent in the previous session, pressured by a stronger dollar and investor concern about the economic outlook and energy demand.
In the latest sign the economy of the world's top consumer was still struggling, data on Thursday showed U.S. employers cut 467,000 jobs in June and the jobless rate rose to a 26-year high. Euro zone unemployment climbed to a 10-year high.
"All the data was bad yesterday," Rob Montefusco, a trader at Sucden Financial. "Technically, it looks pretty weak at the moment."
U.S. crude for August delivery was down 2 cents to $66.71 a barrel by 7:23 a.m. EDT. London Brent crude fell 14 cents to $66.51.
NYMEX floor trading will be closed on Friday for the U.S. Independence Day holiday. Electronic trading will be open. Volume may be lighter than normal, leading to volatile trading, analysts said.
The dollar edged higher against a basket of other major currencies, limiting the appeal of oil and commodities as an inflation hedge. European stocks reversed an earlier gain.
Oil prices have doubled from a low of $32.40 a barrel in December last year and surged over 42 percent in the last quarter -- the largest quarterly gain since 1990 -- partly on hopes of economic recovery.
But the latest economic data is suggesting that a global recovery will be choppy this year, if it occurs at all. Economists have warned that surging unemployment would be one of the key threats to a sustainable recovery.
JP Morgan said in a report on Friday that it expects oil prices to correct from the recent rally to about $60 a barrel or lower, amid demand weakness.
Analysts who use past price moves to predict price direction see a similar prospect.
"Risks are shifting for a downside correction toward $60 in the weeks ahead before the larger bull trend resumes," Barclays Capital technical analysts said.
