Oil hits 7-week low in record volume trade

By Rebekah Kebede

NEW YORK (Reuters) - Oil slid 2.7 percent on Friday to $71 a barrel in record daily trading volumes for the front month crude contract, which extended losses in the biggest three-day percentage loss since September.

U.S. crude oil for March delivery settled down $1.95 at a seven-week low of $71.19 per barrel, after earlier hitting a session low of $69.50. U.S. crude on Thursday closed down 5 percent.

London ICE Brent for March settled at $69.59 a barrel, down $2.54.

Friday's session, in which trading volume hit a record of 540,000 positions, ended the fourth week in a row of oil price declines as demand concerns in the United States, the world's top oil consumer, pressured prices.

Investors fled from risk on Friday and pressured commodities, with gold dropping to a fresh three-month low and other metals also down sharply.

The dollar index, a measure of the greenback's performance against six major currencies, jumped as concern deepened about fiscal problems in south European countries and investors exited riskier plays.

"The dollar remains the focal point for both the equity and commodity markets as Greece's debt issues put pressure on the Eurozone," said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.

Additional pressure followed U.S. jobs data, which showed U.S. employers unexpectedly cut 20,000 in January, even as the unemployment rate fell to a five-month low of 9.7 percent.