Brent crude oil futures fell below $110 a barrel on Friday, pressured by a stronger dollar after positive U.S. data, higher-than-expected supply from the North Sea and OPEC, and investors selling out of commodities in favour of equities.
Brent futures were down $1.44 to $109.71 a barrel at 1406 GMT. Brent is down for the fourth consecutive week, its longest weekly losing streak since May 2012.
U.S. oil was down 49 cents to $91.07, after ending more than a $1 higher in the previous session on an unexpected drop in U.S. unemployment benefits.
Traders and analysts said a stronger dollar had undermined oil prices after Friday's U.S. non-farm payrolls smashed expectations. The closely-followed figures surged by 236,000 jobs in February, easily beating economists' expectations for a gain of 160,000.
At 1407 GMT the dollar was up 0.86 percent against a basket of currencies. A stronger dollar makes commodities priced in dollars more expensive for buyers using other currencies.
"The employment report showed solid gains," said John Kilduff, a partner at Again Capital in New York. "It appears good enough to further the equity market rally and the dollar. Perversely, the strengthening dollar will limit gains in crude oil, due to the inverse correlation."
However, he noted that the report confirmed solid gains in gasoline demand, with an increase in drivers going to new jobs.
Investors have been liquidating long positions across the commodities complex and adding to equity market holdings in the last two weeks. World shares hit their highest level since June 2008 on Friday.
"The easy money is going into stocks, and commodities are not getting any traction," said Ole Hansen, head of commodity strategy at Saxo Bank. "The dislocation is growing."
Oil prices rose in the first three weeks of the year on expectations of buoyant global economic growth but have given up gains in recent weeks due to concerns that central banks will curtail their policy easing measures.
Oil markets sold off heavily in the second half of February as some of the speculative length came out of the market.
"We have realigned ourselves with the fundamentals around $110 and are in a range of $109-$113 a barrel at the moment," said Hansen. "And until we see a new catalyst that's where we'll be stuck."
NORTH SEA SUPPLIES
Traders added that supply fundamentals were pressuring oil prices, with the restart of the Brent pipeline system in the North Sea and higher OPEC shipments expected in March.
The 80,000 barrel-per-day (bpd) Brent oil pipeline system, which forms part of the global benchmark, was shut last Saturday after more oil was found to have leaked into a leg of the 10,000 bpd Cormorant Alpha platform. Flows through the pipeline have now resumed.
"The supply issues have been resolved," said Tony Machacek, a broker at Jefferies Bache in London.
He also cited a higher-than-expected North Sea Forties crude programme for April, with 400,000 bpd scheduled to load, up from 368,000 bpd originally planned in March. Forties is one of four key streams that underpin the Brent benchmark.
A forecast for higher oil shipments from the Organization of the Petroleum Exporting Countries in the four weeks to March 23 is also pressuring oil prices.
Seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 420,000 barrels per day (bpd) said British consultancy Oil Movements.
CHINA FAILS TO SUPPORT
The oil market failed to find support from relatively positive Chinese data, with the country's exports for January and February up 23.6 percent, beating expectations for a rise of 17.6 percent.
Analysts look at the combined figures because of distortions caused by the Lunar New Year holidays, which fell in January in 2012 and in February this year.
"There are probably still a few concerns brewing with regard to China," Hansen suggested.
China's February crude oil imports fell nearly 9 percent from a year earlier, but 2012 set a very high base level with imports hitting 5.95 million bpd, the second highest on record.
"The market is not trading on this data," said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt. "The crude oil imports figure is actually the strongest part of the commodity complex. Imports of copper and soybeans plunged." (Additional reporting by Ramya Venugopal and Manash Goswami in Singapore, and Simon Falush in London; editing by William Hardy and Keiron Henderson)