Oil slipped back after touching a seven-month high over $70 per barrel today as US employment data showed a slower pace of job losses.
A government report said US employers cut 345,000 jobs last month, the fewest since September and far less than forecast, suggesting the economy's severe weakness was diminishing.
Oil prices slipped in very choppy trading as traders came in to take profits after the surge, which pushed prices to their highest level since the first week of November.
US crude for July delivery was down 31 cents to $68.50 after peaking at $70.32. London Brent was down 41 cents to $68.30.
Analysts say oil prices were driven by macro-economic data from the US because it is the world's biggest oil consumer and key to global oil demand.
They said the payrolls data indicated that the worst of the downturn was over and reflected two months of increasingly positive economic data, which had helped fuel a broad-based rally across equity and commodity markets.
Oil prices have risen sharply from lows near $30 a barrel this winter but are still less than half their record peak last July at over $147 as recession has bitten deep into oil demand.
US investment bank Goldman Sachs said yesterday a potential economic rebound alongside production cuts by OPEC could propel crude to $85 a barrel by the end of the year and to $95 a barrel by the end of 2010.
This view is shared broadly by the head of the Organisation of the Petroleum Exporting Countries Oil producing group, who told an Energy Summit this week that prices could reach $80-$90 per barrel by early next year.
