Oil prices fell Friday as an unexpectedly large drop in the nation's unemployment rate boosted the dollar.
Crude, which is bought and sold in dollars, has been pulled higher all year with the U.S. currency so weak.
A weak dollar allows investors holding stronger currencies to get more crude for less money.
Early Friday, the Labor Department said the country's unemployment rate fell to 10 percent in November. The economy shed only 11,000 jobs last month — much better than the 130,000 that Wall Street had expected.
Crude initially surged along with the dollar on expectations that the economy was improving and demand would increase. Yet, as it has all year, the currency trade in crude appeared to take precedence, and futures contracts began to fall on the New York Mercantile Exchange by midday.
Benchmark crude for January delivery fell 59 cents to $75.87. In London, Brent crude for January delivery gave up 25 cents to $78.11 on the ICE Futures exchange.
Many energy experts think energy prices are still to high, that the price of crude, gasoline and other fuels has risen too far, too fast.
One need only look at energy supplies to see what the recession has done to demand, both for consumers and heavy industrial users.
The amount of crude available in the U.S. is 6 percent higher than a year ago and its about the same story for gasoline. Distillates are a whopping 23 percent higher than last year and there is nearly 23 percent more heating oil on hand.
There is so much natural gas, the nation's ability to store it is nearly maxed out and in the West and the Gulf of Mexico, storage facilities are filled beyond estimated capacity.
Energy Information Administration statistics show the U.S. has cut back on oil and gasoline use since September. The 18.5 million barrels of petroleum consumed last week is less than what the country used a decade ago.
Crude prices are closer to $80 than $70 per barrel, however, and that has helped support gas prices.
At the pump, retail gas prices increased slightly overnight to a new national average of $2.637 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 4.7 cents cheaper than a month ago, but it's 84.8 cents more expensive than a year ago, when gas prices were falling fast.
In other Nymex trading in January contracts, heating oil fell less than a penny to $2.0424 a gallon, and gasoline lost less than a penny to $1.9865 a gallon. Natural gas rose 15.5 cents to $4.614 per 1,000 cubic feet.
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