Crude falls 2% on rising dollar, economic worries

(MarketWatch) -- Crude-oil futures tumbled more than 2% to below $123 a barrel Friday, extending crude's weekly losses to nearly 5%, as economic worries continued and as the dollar gained ground after the better-than-expected U.S. durable goods data.

"The exhibited selling pressure was a statement of acknowledgement of the adverse effect that high oil prices and credit market woes are having on the global economy," said John Kilduff, an analyst at futures brokerage MF Global.

Crude oil for September delivery dropped 2.4% to an intraday low of $122.50 a barrel. It was last down $2.03, or 1.6%, to $123.47 on the Chicago Board of Trade. Crude is now down about $24 from its highest hit on July 11.

Investors were increasingly worried that economic slowdown will dampen oil demand. Over the past four weeks, U.S. motor gasoline demand has averaged 9.3 million barrels per day, down by 2.4% from the same period last year, the Energy Information Administration reported Wednesday.

In the face of falling consumption, investors sold crude contracts and pushed prices 4.8% lower this week. Crude has fallen seven out of nine sessions since it closed at a record high of $145.18 a barrel on July 14.