WTI oil price closes under $74 a barrel on higher dollar

WTI oil prices continued to slide on Friday, closing under $74 a barrel as a sell off in stock markets and a strengthening US dollar weighed on crude oil futures.

US Light crude oil futures for September 2010 delivery closed the week at $73.82 a barrel on the NYMEX.

Fears about a slowing recovery triggered risk aversion in the market, which sent the dollar rising against the euro and the sterling pound. Usually a strong US dollar would limit oil investors appeal as an alternative investment.

The ICE Dollar Index, which tracks the dollar against a trade weighted basket of currencies, rose to a one month high at 83.237.

“The energy market is looking out of breath and momentum, and it is likely that crude oil prices will possibly see a second week of heavy losses.” said Myrto Sokou, an analyst at Sucden Financial Research.

“Fears about the economy are not good for oil prices. As total US petrol supplies rise to all time highs it can only mean one thing and that is demand is falling far below supply.” analyst Phil Flynn of PFG Best Research said.