On the New York Mercantile Exchange, light sweet crude futures for delivery in August settled at USD84.06 a barrel by close of trade on Friday. Earlier in the day, prices hit USD84.03 a barrel, the lowest since July 3.
For the week, oil declined 0.57%, the eighth weekly loss in the past ten.
Oil futures tumbled more than 3% on Friday after the Bureau of Labor Statistics said that the U.S. economy added 80,000 jobs in June, below market expectations for a gain of around 90,000.
April figures were revised to 68,000 from 77,000 jobs, while May's numbers were revised to 77,000 from 69,000.
The report also showed that the U.S. unemployment rate held steady at 8.2% in June, in line with expectations.
Oil traders have long been taking cues from the monthly jobs report, the most-closely followed indicator of U.S. employment, because it offers insight into the economic health of the world's biggest crude oil consumer.
The disappointing data prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the U.S. dollar.
The euro sank to the lowest level since July 2010 against the dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose to 83.47, gaining 2% on the week.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Meanwhile, investors continued to monitor developments in the euro zone, amid sustained fears over the region’s debt crisis.
Spanish 10-year yields settled the week at 6.95% on Friday, reversing the decline made in wake of last week’s European Union summit and re-approaching the critical 7%-level deemed as unsustainable in the long-term.
On Thursday, European Central Bank President Mario Draghi said that the region’s economic outlook faces downside risks, adding that indicators for the second quarter point to weakening growth in the euro zone.
Draghi refused to speculate, however, on the chances of a third round of Long Term Refinancing Operations, which provides cheap loans to European banks to encourage them to lend.
The comments came after the central bank cut its benchmark interest rate to a record low 0.75% in July, in a bid to bolster faltering growth in the region.
There are worries that the region’s worsening sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
A series of stimulus measures by world central banks further underlined fears over weaker global growth prospects.
In addition to the ECB rate cut, Bank of England policymakers voted Thursday to increase the size of its quantitative easing program by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
The bank also left the benchmark interest rate unchanged at 0.5%, where it’s stood since March 2009, in a widely expected move.
Elsewhere, China surprised traders by cutting interest rates for the second time in less than a month, signaling that growth is slowing more than Beijing expected.
Energy prices were well-supported earlier in the week, with crude prices hitting a five-week high of 88.97 a barrel on Thursday as concerns over a disruption to supplies from Norway boosted prices higher.
Norway is the world's eighth largest oil exporter.
Oil prices also drew support from escalating geopolitical tensions between Iran and the West.
Media outlets in Tehran reported earlier in the week that Iran had successfully tested medium-range missiles capable of hitting Israel in response to threats of military action against the country.
In addition, Iran's National Security and Foreign Policy Committee drafted a bill proposing to block the Strait of Hormuz for oil tankers in response to a European Union oil embargo on imports from Iran, which started on July 1.
The Strait of Hormuz, located between Iran and Oman, is one of the most important oil-shipping channels in the world, handling about 33% of all ocean-borne traded oil, according to the U.S. Energy Information Administration.
U.S. oil prices hit a high of USD110.53 on March 1, at a time when tensions over Iran's nuclear program were running high.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery settled at USD97.83 a barrel by close of trade on Friday. Prices hit USD102.33 a barrel on Thursday, the lowest since June 7.
The Brent contract rose by a modest 0.44% over the week, while the spread between the Brent and the crude contracts stood at USD13.77 a barrel by close of trade Friday.
Brent prices have been well-supported in recent sessions amid concerns over a disruption to supplies from Norway, but prices retreated Friday amid expectations an oil strike in the country will soon end.
Norway's Minister of Labor Hanne Bjurstrom urged the oil companies and union representatives to continue talks over the weekend.
In the week ahead, investors will be closely watching ECB President Draghi’s testimony before the European Parliament, on Monday, as well as a two-day meeting of euro zone finance ministers, amid expectations for a final agreement on aid for Spanish banks.
Markets will also be eyeing the minutes of the Fed’s latest policy meeting as well as U.S. data on trade balance and unemployment claims.
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