NEW YORK (Reuters) - Oil fell on Friday as traders took profits from a rally to a seven-month high over $70 a barrel after U.S. employment data showed a slower pace of job losses.
A government report said U.S. employers cut 345,000 jobs last month, the fewest since September and far less than forecast, suggesting the economy's severe weakness was diminishing.
"Good news at last. At some point we had to start moving to the 300,000-range. After all, we already laid off an incredible amount of people," said Kurt Karl, chief U.S. economist at Swiss Re in New York.
Oil prices seesawed in choppy trade. Breach of the $70-a-barrel mark, the highest level since the first week of November, brought out profit-takers who pushed prices down.
Prices moved up again until the dollar's gain against the yen and euro on the market's positive spin on the payroll numbers exerted downward pressure on the price of oil.
U.S. crude for July delivery settled down 37 cents at $68.44 a barrel. The intraday high was set at $70.32
London Brent last traded down 37 cents at $68.34.
Phil Flynn, analyst at Alaron Trading in Chicago, said the market slipped back after the data "on profit-taking after the high above $70.
"The unemployment numbers were great in that there were fewer people losing their jobs, but the rate of unemployment rose more than expected. That is disappointing for the market as it raises worries about the long-term prospects in the job market," Flynn said.
Mike Fitzpatrick, vice president at MF Global in New York, said better jobs data was already priced into the market.
"And there's growing awareness that higher prices will make any recovery much shallower," he added.
$85 A BARREL
Signs the global economy is starting to pick up are expected to provide support for higher oil prices.
Fuel demand is seen rising in China, the world's second largest oil consumer, given the steady increase in automobile sales and industrial activity, while the recent increase in prices provide an additional incentive.
Oil prices have closed higher over the past two weeks, up sharply from lows near $30 a barrel this winter.
