Oil prices eased lower Monday after spiking to seven-month highs above 70 dollars before the weekend, as dealers banked profits amid a recovering US currency.
New York's main futures contract, light sweet crude for delivery in July, dipped six cents to 68.38 dollars a barrel. On Friday the contract had touched 70.32 dollars -- the highest level since November 4.
In late morning London trade on Monday, Brent North Sea crude for July delivery dropped 19 cents to 68.15 dollars.
Despite the declines, "pricing continues to be very strong and the trade momentum is really resisting downward pressure from the (supply and demand) fundamentals," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
"Crude prices are due for a correction but trade momentum will continue to keep pricing at a strong level."
Shum said the oil prices had been winning support on hopes that the ailing global economy would recover faster than anticipated. But he also cautioned that there was more supply than demand and this should keep prices in check.
Crude oil will remain priced at around 65 to 70 dollars a barrel until the end of 2009 before rising, Algeria's Energy Minister Chakib Khelil said on Saturday.
"The market will stay within a band of 65 to 70 dollars until the end of 2009 because (US) fuel consumption will rise in summer, but it is difficult to predict the market," Khelil said in Algiers, quoted by the local APS agency.
"The price of oil will very probably pass the 70-dollars-a-barrel limit from 2010, as the world economy recovers," he added.
A rise in the dollar after a mostly positive American jobs report was weighing on oil prices, traders said.
The US Labor Department had on Friday said that the jobless rate surged to 9.4 percent in May, but the number of job losses slowed to a better-than-expected 345,000.
The report, seen as one of the best indicators of economic momentum, offered conflicting signals about a weak labour market, but suggested that the pace of massive job cuts is easing, a positive sign for a recession-battered economy.
A stronger US currency makes dollar-priced crude more expensive for buyers holding weaker currencies, in turn denting demand and pushing down prices. When the dollar weakens the reverse tends to occur.