By Barani Krishnan  

Investing.com — U.S. crude prices posted their first weekly loss in three on Friday as a resurgent dollar smothered most commodities. 

Global oil benchmark Brent also had its first weekly dip since January though the drop barely made a dent on market sentiment with the London-traded crude staying at just under the key $70 per barrel mark.

Futures of New York-traded , the benchmark for U.S. crude, settled at $65.61, down 41 cents, or 0.6%, on the day. For the week, it lost 0.7%.

also fell 41 cents, or 0.6%, to settle at $69.22. On the week, it fell just 14 cents, or 0.2%.

“Brent crude will remain stuck around the $70 level until the oil demand outlook improves in Europe, which will only happen when they stop struggling with COVID variants,” said Ed Moya, analyst at New York’s OANDA. 

Oil started the day higher in Asian trading as markets celebrated President Joe Biden’s signing into law on Thursday his signature $1.9 trillion Covid-19 bill. The stimulus package aims to vaccinate the country’s entire adult population before Independence Day on the 4th of July; fund states and businesses; and put money into Americans’ pockets besides finding them work. All these are positives for oil.

But as the day progressed, bond yields tied to the benchmark spiked along with the dollar. That took the shine off most commodities, including the dollar.

Bond yields hit pre-pandemic highs since last month on the argument that economic recovery in the coming months could overheat, leading to spiraling inflation, as the Federal Reserve insisted on keeping interest rates at near zero.

The , which should logically tumble in an environment of heightened inflation fears, also rallied on the same logic of runaway economic recovery. The greenback’s standing as a safe haven, due to its reserve currency status, led to new long positions being built in the dollar.