NEW YORK (MarketWatch) -- Oil futures were modestly higher in volatile trading Friday, after tumbling to a 19-month low in the previous session as a bleak economic report showed that the U.S. unemployment rate soared to a 14-year high in October.
Crude for December delivery gained 64 cents to $61.44 a barrel in electronic trading on Globex.
Earlier in the session, the contract fell to an intraday low of $59.97 a barrel.
"A dip into the $50s overnight seems to make oil look a bit oversold and I think we might see it back in the mid-$60s next week," said Zachary Oxman, a senior analyst at Wisdom Financial.
On Wall Street, U.S. stocks posted strong gains, with the Dow Jones Industrial Average rising 160 points. See Market Snapshot.
Crude futures ended down $4.53, or 7%, to $60.77 a barrel Thursday on the New York Mercantile Exchange.
Analysts at Sucden Research said that from a technical standpoint "the break of the $60-a-barrel mark now leaves the market vulnerable to further losses toward $50 a barrel."
"The only real potential bullish factor on the horizon that could halt the slide in oil prices is if OPEC can agree and deliver another cut," they said, referring to the Organization of Petroleum Exporting Countries cartel.
In late October, OPEC members agreed to decrease the current OPEC-11 production ceiling of 28.8 million barrels a day by 1.5 million barrels a day starting on Nov. 1.
Venezuela's oil minister told Reuters Thursday that OPEC should reduce production by at least a further 1 million barrels a day to strengthen oil prices.
Bleak jobs data
In economic news, the Labor Department reported that the U.S. unemployment rate jumped to a 14-year high of 6.5% in October as nearly a quarter of a million jobs were lost.
Nonfarm payrolls fell by 240,000 following a revised decline of 284,000 in September -- the largest job loss in seven years. Read more.
"The 240,000 drop in employment should lower expectations for the economy and petroleum consumption," said James Williams of WTRG Economics.
"It should move prices down, but it must contend with any dollar weakness which drives prices higher," he said.
The U.S. dollar fell after the jobs data indicated continued pain for the economy. The dollar index , a measure of the greenback against a trade-weighted basket of six currencies, fell to 85.359 from 86.280 in late North American trading on Thursday. See Currencies.
One of the main reasons for the recent sharp decline in oil prices has been concern that such a recession will severely reduce demand for oil.
The drop in crude prices near two-year lows on Thursday came about "as fears continue to mount about both the depth and duration of the current global downturn," said Edward Meir, an analyst at MF Global, in a research note.
On Thursday, the International Monetary Fund "predicted ... developed economies will deliver their worst economic performance since World War II, and given the cascade of depressing statistics we are seeing of late, we would have to agree," Meir said.
Specifically, the IMF said world output would fall to 2.2% growth in 2009, down from 3.7% pegged for 2008. This projection is below the IMF's prior 3% forecast released just a month ago, implying a global recession. Read more.
Also on the Globex Friday, December reformulated gasoline gained 2 cents to $1.36 a gallon and December heating oil rose 2 cents to $1.96 a gallon.
December natural gas fell 14 cents, or 2%, to stand at $6.84 per million British thermal units.
