* Oil hits highest since early November, then retreats
* U.S. nonfarm payroll figures much better than forecast
* Expectations of early end to recession
(Refiles to clarify first paragraph. Changes byline, dateline,
recasts, updates prices, paragraphs 1-5)
By Janet McGurty
NEW YORK, June 5 (Reuters) - Oil fell 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 <CLc1> was down 6 cents at
$68.75 by 11359 EST after peaking at $70.32.
London Brent <LCOc1> was down 11 cents at $68.60.
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 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.
They are still less than half their record peak last July
of over $147 as the recession has cut deeply into oil demand.
On Thursday, U.S. investment bank Goldman Sachs said that 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 Organization
of the Petroleum Exporting Countries Oil producing group, who
told Reuters Energy Summit this week that prices could reach
$80-$90 per barrel by early next year.
(Additional reporting by Christopher Johnson in London, Lucia
Mutikani in Washington; editing by Jim Marshall)
