Forex Pros – Last week saw crude oil prices pull back from a three-week high on Friday, after weak employment data added to concerns over the U.S. economic outlook and weighed on demand expectations from the world’s largest oil consumer.  

On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD96.52 a barrel by close of trade on Friday, gaining 1.5% over the week. 

The August contract rose to USD99.40 on Thursday, the highest price since June 15 after two better-than-expected U.S. employment readings boosted expectations for a strong payrolls report on Friday. 

But prices slumped nearly 2.2% after the U.S. Department of Labor said that nonfarm payrolls rose by a disappointing 18,000 in June, significantly below expectations for an increase of 89,000, as employers hired the fewest workers in nine months.

The previous month’s figure was revised down to a gain of 22,000 from a previously reported 54,000.

The June unemployment rate rose unexpectedly from 9.1% to 9.2%, the highest level in six months.

Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.

Meanwhile, the U.S. Energy Information Administration said in its weekly report on Thursday that U.S. crude oil inventories fell by 0.9 million barrels in the week ended July 1, short of expectations for a 2.5 million barrel decline.

Total U.S. motor gasoline inventories declined by 0.6 million barrels, confounding expectations for a 0.8 million barrel increase.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery traded at USD117.61 a barrel by close of trade on Friday, the highest price since June 14.

The Brent contract rallied 5.4% on the week and was up USD21.09 on its U.S. counterpart, the widest spread between the two contracts since June 15, when the premium reached a record USD23.34.

Global financial service provider Citigroup said on Thursday that Brent’s premium to U.S. crude may widen to at least USD40 a barrel between now and the middle of 2012, citing a disruption to supplies in the North Sea.