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Crude oil prices tumbled about 3% on Fri after a sterling U.S. jobs report for Jan bumped up the dollar from 10-month lows which weighed on commodities and as investors sought more clarity on the imminent EU embargo on Russian refined products. Some 517,000 jobs were added last month, the Labor Department's NFP, or nonfarm payrolls, report said. That was almost 3 times above the forecast growth of 188,000 and against Dec's revised NFP number of 260,000. The outperformance threw a fresh challenge to the Fed, which had been hoping its aggressive rate hikes over the past year would have sufficiently cooled the labour market and wages to get inflation back to its target. But a further moderation in wage gains should give the Fed some comfort in its fight against inflation.

Brent crude for Mar delivery settled down 2.7% on Fri at USD79.94. For the week, it was down 7.8%, after last week's near 3% loss. For Feb thus far, Brent has lost 5.4%, extending its compounded 6.5% slide for Jan and Dec.

WTI crude for Mar settled down 3.2% on Fri at USD73.39. For the week, the U.S. crude benchmark was down by 7.9%, after the drop of nearly 3% in the final week of Jan. Month-to-date, WTI was down about 7%, extending its near 9% slide over 3 previous months.

The Dollar Index and yields on the U.S. 10-year Treasury note, which act as contra trades against risk assets that include stocks and commodities, surged and could continue rising if the Fed rethinks its plan about further consolidating rate hikes this year. The central bank went from a 50-basis point rate hike in Dec to 25-basis points in Feb.

"The market can't decide whether it should be nervous about a recession or more worried about the Federal Reserve being aggressive with interest rates," said Phil Flynn, analyst at Price Futures Group.

As though sensing a tougher challenge for this year, Fed Chair Jerome Powell said that while the pace of job gains had slowed late last year, "the labour market continues to be out of balance".

Oil prices have been on the back foot since a 6th straight weekly build in U.S. crude, along with surpluses in fuel, reported by the EIA this week.

Also weighing on the market were uncertainties over how well demand from China would fare in Feb, more than a month after the top crude importer abandoned all COVID restrictions.

On China's side, crude imports were assessed at 10.98m bpd in Jan, down from Dec's 11.37m bpd and Nov's 11.42m bpd.

European Union countries agreed to set price caps on Russian refined oil products to limit Moscow's funds, the Swedish presidency of the EU said on Fri. These may provide support to crude oils.

EU diplomats said the price caps are USD100 per barrel on products that trade at a premium to crude, principally diesel, and USD45 per barrel for products that trade at a discount, such as fuel oil and naphtha.

The Kremlin said the EU embargo on Russia's refined oil products would lead to further imbalance in global energy markets.