NEW YORK (AFP) — Oil prices slipped Friday after a shockingly weak US employment report fanned worries about recession and demand in the world's biggest energy consumer.
New York's main contract, light sweet crude for delivery in February, dropped 1.27 dollars to close at 97.91 dollars a barrel.
In London, Brent North Sea crude for February shed 81 cents to settle at 96.79 dollars
A lackluster US jobs data triggered profit taking a day after oil prices briefly struck intraday record highs.
On Thursday, the benchmark New York contract hit 100.09 dollars and Brent touched 98.50 dollars.
The US Labor Department reported the US economy gained 18,000 nonfarm jobs in December, the slowest job creation since 2003, as the unemployment rate rose to 5.0 percent, more than a two-year high.
The reading toppled market expectations of a 70,000 jobs increase and a 4.8 percent jobless rate, up from 4.7 percent in November.
The surprisingly weak report was a fresh warning flag of a slowing economy and prompted speculation that the Federal Reserve would lower interest rates again, after a combined one percentage point reduction since September.
"There should be every reason to think that the poor jobs number will return the focus to the economic slowing theme," said John Kilduff of MF Global.
"While the bull run in the energy markets may have a last gasp or two, the report will underscore the trouble on the economic front."
Despite the pullback Friday, some analysts said oil prices remained well supported and could soon strike new all-time peaks.
Sucden analyst Andrey Kryuchenkov noted a "favorable" combination of declining inventories, a weak dollar, soaring oil demand from Asia and geopolitical risks had helped to propel crude prices to 100 dollars.
"It seems that these factors will continue to dominate oil headlines in the foreseeable future. And even if we see a deeper correction in oil prices, in the longer term, the bullish trend is likely to prevail, as spare capacity on the supply side is very limited and demand is still growing," he added.
Thursday's declines were largely fueled by a US government showing American crude inventories had fallen by 4.0 million barrels last week, stoking supply concerns.
It was the seventh week in a row that stockpiles had dropped.
For Phil Flynn at Alaron Trading, the oil rally is being driven by "a kind of bullish inevitability in the press."
"What is clear based on yesterday's report is that oil needs a piece of news to drive us through 100 dollars a barrel or that new money that expects instant gratification will have to cover" when prices do not go much higher, he said.
Meanwhile the oil-producing cartel OPEC was expected to face fierce pressure to help calm the market at a special meeting on February 1.
The 13-member Organization of the Petroleum Exporting Countries shrugged off demands at its last meeting in December, despite a public plea from US Energy Secretary Samuel Bodman for an output increase.
The Saudi-led cartel pumps about 40 percent of world oil supplies but restricts the output of its members through a quota system that is regularly reviewed.
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