Oil prices fall as dollar climbs

Brent North Sea crude for delivery in January shed 93 cents to $85.17 a barrel in London trade.

New York's main contract, light sweet crude for January, fell 79 cents to $83.07.

The euro tumbled close to $1.32  on Friday, touching a fresh two-month low as persistent worries about eurozone debt and Korea boosted the safe-haven US unit, dealers said.

A stronger dollar makes dollar-priced crude more expensive for buyers using weaker currencies which in turn tends to hit demand and prices.

"Crude oil prices retreated ... as worries about the eurozone's sovereign debt contagion continued to weigh on the oil market while trading volumes remain fairly light after the US Thanksgiving holiday on Thursday," said Sucden analyst Myrto Sokou.

"It seems that uncertain economic conditions continue to dominate the markets," she added.

"Investors remain cautious and are prompted to some ... profit-taking following persistent worries about the eurozone's economic stability, the geopolitical tensions in the Korean peninsula and renewed concerns about China's tightening of monetary policy."

World financial markets have been rocked this week by eurozone debt worries and North Korea firing dozens of artillery shells onto a South Korean island on Tuesday, killing four people and triggering an exchange of fire.

On Friday, traders also fretted over the impact of Chinese attempts to curb rising inflation.

Inflation pressures are growing in commodities-hungry China, a senior central bank official said this week, stoked by of flows of capital into the country and expectations of a revaluation of the yuan.

Trade was somewhat subdued on Friday in the wake of the Thanksgiving holiday on Thursday in the United States.

"Thanksgiving in America meant limited trading," noted Westhouse Securities analyst David Hart.