Oil prices plunged in a busy trading session on Friday, triggering big losses across the commodities markets, as investors went back to buying into the US dollar.  Crude oil prices did have a partial recovery, with March US Light oil futures contract settling at $71.19 a barrel on the NYMEX, down 2.7%, while in London, Brent crude oil futures for March delivery dropped to close trading at $69.59 per barrel on ther ICE Futures Exchange.

“People are buying the dollar,” said Michael Gross, broker and futures analyst with OptionSellers.com. “Funds are liquidating everything else.” The week’s wild commodity price swings underscore how investors aren’t totally committed to betting that the world economy is on an upward track.

Commodities including crude oil futures rose steadily last year in anticipation of strong growth in 2010; now, many investors fear commodities pose too big a risk amid the uncertain outlook.

“Volatility now is here to stay, it’s something we’re going to have to learn to live with,” said Rick Mueller, director of oil markets at Wakefield, Mass., consultancy Energy Security Analysis.

The rush to the exits Friday began when oil prices fell below the 2010 low of $72.43 a barrel. Prices managed to bounce back from around that price three times in the past week, including during Thursday’s steep slide. But on Friday, support crumbled amid concerns about weak oil demand in what is shaping up to be a slow economic recovery.

The breach triggered numerous automatic orders to exit trading positions many investors set up around certain price milestones. Within minutes, oil prices had tumbled to $69.50 a barrel, the lowest since December 15th 2009.

The US dollar benefitted, at one point hitting the strongest point in eight months on the euro, a stronger dollar tends to have a negative impact on US dollar denominated commodities including oil prices.

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