Crude-oil futures fell 2% Friday, hit by fresh fears of economic turmoil in Europe that sent equities tumbling and the dollar higher.

Investors fled from the euro due to growing worries of a Greek default and the potential reverberation through the global economy. Aggressive moves out of the common currency sent the euro to its lowest level against the Japanese yen since January 2001 and to a seven-month low against the dollar. Strength in the U.S. currency steered buying interest away from dollar-based oil futures, which grow more expensive for investors using some foreign currencies.

The European worries diverted attention from the $447 billion mix of tax cuts and spending initiatives unveiled by President Obama on Thursday evening to a joint session of Congress. U.S. Treasury Secretary Timothy Geithner talked up the Obama plan Friday ahead of the weekend meeting of Group of Seven finance ministers and central bankers in France. He also urged European nations to show that they have enough political will to deal with the financial crises roiling the continent, but said he didn't expect the talks to yield any "dramatic" announcement on efforts to fix the weak global economy.

The resignation of Germany's top representative to the European Central Bank on Friday, over a policy dispute, fueled new doubts about the potential for resolving the euro-zone economic crisis. The ECB earlier in the week scaled back its economic growth forecasts for the region.

Tumult in the currency market dovetailed Friday with indications that crude oil was under pressure after failing to hold above the $90 a barrel it briefly broke this week for the first time in a month.

"This was a currency play, not mass panic," said Rich Ilczyszyn, a market strategist at MF Global. "Some folks who made a few bucks in crude this week are taking off some risk."

Light, sweet crude oil for October delivery on the New York Mercantile Exchange settled 2%, or $1.81 a barrel, lower at $87.24 a barrel. The contract traded in a range of $85.64 to $87.75. Crude oil ended a holiday-shortened week 79 cents higher than last Friday. But that belies the volatility of a $7 intraday trading range over the past four sessions.

While the economic clouds drew darker in Europe, forecasts from the National Hurricane Center suggest that oil- and gas-producing facilities in the U.S. Gulf may avoid a direct hit from Tropical Storm Nate, which is now expected to hit Mexico as a hurricane on Sunday. Some companies have evacuated non-essential personnel from platforms as a precaution, even as output is returning to normal after shut-ins caused by Tropical Storm Lee last weekend. Government data showed a little more than 87,000 barrels of oil is still shut-in, about one-tenth of the volume at the peak impact from the storm.

Gasoline futures fell to the lowest level in a month as demand last week fell to its lowest early-September level in eight years. The weak end to a disappointing peak summer driving season came as Hurricane Irene struck on the East Coast. October-delivery reformulated gasoline blendstock futures settled 4%, or 11.42 cents lower, at $2.7710 a gallon.

Heating-oil futures for October settled 1.9%, or 5.85 cents, lower at $2.9858 a gallon.