The price of oil extended a week-long plunge Friday, falling 1.6 percent to below $94 a barrel, as a rebounding U.S. economy drove the dollar higher and signs continue to emerge that there is an ample supply of crude worldwide.
Benchmark U.S. oil for February delivery fell $1.48 to close at $93.96 a barrel in New York. Brent crude, used to price international crude processed by many U.S. refineries, fell 89 cents to close at $106.89 a barrel in London.
U.S. crude fell by $2.98 on Thursday, the biggest one-day drop since November of 2012. Prices have fallen 6.4 percent over the past week, after oil closed above $100 last Friday for first time since October.
A financial recovery in the U.S. would typically drive oil prices higher, given the appetite of the world's largest economy. But that recovery has been driven in part by a massive bond-buying program at the Federal Reserve that has encouraged investors to buy commodities, which has pushed their prices higher.
The Fed recently began winding that program down, however. That is helping to boost the value of the dollar and leading investors away from oil.
A stronger dollar makes commodities such as oil that are priced in dollars more expensive for buyers using other currencies.
Demand is rising in the U.S., but supplies appear to be sufficient. The Energy Department reported Friday that average petroleum demand over the past four weeks rose 3.3 percent compared with last year. While oil stocks fell by 7 million barrels, that is "above the upper limit of the average range for this time of year," according to the weekly status report.