Oil prices slipped below $61 on Friday on persisting worries about the fiscal outlook for the United States, the world's top energy consumer, but losses were limited by data showing a big increase in Chinese demand. U.S. crude futures fell 8 cents to $60.97 a barrel by 12:10 p.m., off the day's high of $61.98. London Brent fell 1 cent to $59.92 a barrel. "Oil looks a little overheated heading into the long weekend," VTB Capital analyst Andrey Kryuchenkov said. "Traders are still eyeing weakness in equities and a swinging U.S. dollar, but there is some solid support above $60." U.S. markets will be closed on Monday for the Memorial Day holiday. Oil prices have rallied nearly $4 this week, boosted by a spate of U.S. refinery problems and unrest in major oil exporter Nigeria, and are nearly double their lows hit over the winter, on hopes the economic recession is easing. Investment bank Goldman Sachs said the rise in prices this week was due to real oil market fundamentals, after weeks of rallies due to hedging against a weak dollar and equity market rallies. The Nigerian military has launched its biggest campaign in years in the country's oil heartland, bombarding militant camps, which has sent fears of further supply disruptions from the West African country through oil markets. In the United States, refinery fires pushed up gasoline prices ahead of the Memorial Day holiday this weekend, which kicks off the country's summer driving season. In China, the world's second-largest energy consumer, apparent oil demand rose 3.9 percent in April from a year earlier, data showed on Friday. It was the first significant rise since October. Oil traders were expected to shift their focus to next week, when the Organization of the Petroleum Exporting Countries will meet to review its output policy on Thursday. OPEC is expected to keep its official production levels unchanged as rising prices have eased pressure on budgets, and there are hints of economic recovery over the next year, a Reuters poll showed on Thursday.

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