Oil prices pulled back sharply during trading on Friday, more than offsetting the substantial price increase that was seen in the previous session. The pullback by the price of oil was partly due to a rebound in the value of the U.S. dollar.
After ending Thursday's trading up $5.62 at $121.18 a barrel, crude for October delivery closed down $6.59 at $114.59 a barrel. While the price decrease offset yesterday's increase, the price of oil still closed higher for the week.
Benefiting from three days of gains in the middle of the week, the price of oil showed a weekly gain of $0.82 a barrel.
The pullback by the price of oil on Friday came amid a notable rebound in the value of the U.S. dollar, which came under pressure on Thursday following the release of some mixed economic data. The U.S. dollar index has risen 0.6 percent, partly offsetting yesterday's 1 percent decline.
Disappointing economic data out of Europe and the U.K. has contributed to the dollar's upward move versus the euro and the British pound.
Reports that the Russian military is pulling out of three key positions in Georgia also contributed to the pullback by the price of oil.
The sharp rise in the price of oil on Thursday came amid concerns that Russia could cut off energy shipments to Western countries in response to rising tensions with the U.S. and other NATO countries.
Along with the animosity over Russia's violent conflict with Georgia, the U.S. severely angered the Russians on Wednesday with the announcement of its missile shield deal with Poland.
Worries that OPEC may respond to Venezuela's call to increase production at its meeting next month also contributed to the price increase in the previous session.
"If there is a trend or dynamic toward lower oil prices, Venezuela will consider the possibility of a cut in production," said Rafael Ramirez, Venezuela's Energy and Oil Minister. "This is the position that we will take at the next OPEC meeting."
Ramirez said that the steep drop in oil prices that has been seen in recent weeks is proof that there is speculation in the market. He added that prices must be maintained at around $100 a barrel due to increased production costs.
With the weekly increase, the price of oil has moved off its recent lows, although it is currently more than $30 a barrel below the record high of $147.27 a barrel set in mid-July.
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