Crude prices retreated on Friday as US unemployment rate rose to the highest since 1992.

Oil prices were traded below US$40 a barrel in early sessions as traders see layoffs as an instant drag on oil demand.

The Labor Department report said 598,000 jobs were lost in January while unemployment rate rose to 7.6 percent, the highest since 1992. For all of 2008, the US economy lost a net total of 2.9 million jobs.

The prices rebounded later in day as US stocks rallied prior to a Senate vote on economic stimulus plan.

Light, sweet crude for March delivery dropped US$1 to settle at US$40.17 a barrel on the New York Mercantile Exchange after falling as low as US$38.60 a barrel.

In London, the March Brent contract was down 25 cents to settle at US$46.21 on the ICE Futures exchange.

(Xinhua News Agency February 8, 2009)