Oil Dives 3% On Surging Dollar, Renewed Supply Worries
NEW YORK, May 7 (Reuters) - Oil prices tumbled 3 percent on Thursday as a resurgent dollar erased gains from the past two sessions, setting the market up for its first weekly loss in five.
Traders and investors also returned their focus to the oversupply in crude and gasoline after Wednesday's euphoria over the first U.S. crude drawdown in months.
The dollar, on a downtrend since the start of May, jumped on optimism that Friday's U.S. employment report for April would show strength after upbeat weekly jobless claims. A stronger greenback makes dollar-denominated commodities less affordable for holders of the euro and other currencies.
"The dollar is definitely the driver in today's tumble, though people are also taking stock of the market's fundamentals and taking some profit after the incredible month of gains we've had," said Phil Flynn, analyst at the Price Futures Group in Chicago.
North Sea Brent crude settled down $2.23, or 3.3 percent, at $65.54 a barrel. For the week, Brent was headed 1.6 percent lower, its weekly loss since April 30.
U.S. crude settled down $1.99, or 3.3 percent, at $58.94 a barrel.
Gasoline fell 2.3 percent, its biggest loss in a month, to settle at just over $1.99 a gallon.
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