Oil slipped under $52 a barrel on Friday after surging by nearly 9 percent the day before, as global markets viewed the outcome of the G20 summit as paving the way for some risk appetite to return.
Oil moved down by around 1.44 percent after data came out showing U.S. employers slashed 663,000 jobs in March, lifting the unemployment rate to 8.5 percent, the highest since 1983.
The jobs report was apparently priced in and was pretty much in line with expectations, said Mike Fitzpatrick, vice president at MF Global in New York.
Analysts polled by Reuters had forecast non-farm payrolls falling 650,000 in March. The Labor Department also revised its January data to show job losses of 741,000 that month.
U.S. light crude for May delivery fell 66 cents to $51.98 a barrel by 1330 GMT (9:30 a.m. EDT), down from Thursday's $4.25 gain that lifted the contract to $52.64.
London Brent crude fell 30 cents to $51.45.
Oil made its largest one-day percentage gain in three weeks on Thursday as markets rallied after world leaders at the summit announced a trillion-dollar deal to act on the economic crisis.
Some market watchers said recent price rises in the crude market, in spite of low demand and heavy supply, were likely to be a sign investors were turning to investments seen as involving more risk, which can include oil.
The last two weeks has been fairly encouraging, said David Dugdale, a London-based energy analyst at MFC Global Investment Management.
(U.S. Treasury Secretary Timothy) Geithner's procedures for quantitative easing and yesterday's G20 seem to have provided enough for the bulls to now move into risk assets.
Analysts at J.P. Morgan wrote in a note to investors that recent OPEC production cuts seem to have tightened supply, and a build in U.S. crude oil in the last three weeks was an inventory head fake -- a false signal of direction.
If there was truly a significant global surplus, you would not only expect crude oil stocks to be building onshore, but you would also expect the contango on global benchmarks to be widening.
Contango is a market term meaning prices for future delivery are above current levels. When there is a wide contango it pays for some investors to store oil on ships to sell at a later date.
In the past month the spread for Brent futures has narrowed from $1.44 on March 3 to around $1.23 on Friday, according to Reuters data.
The tightening of spreads had meant that the floating storage play is no longer as profitable as it once was, J.P. Morgan analysts wrote.
In January, oil majors, traders and OPEC producers were thought to be storing 60-70 million barrels of oil at sea, mostly in the U.S. Gulf, with Norway's Frontline estimating the armada of tankers holding up to 80 million barrels.
U.S. factory orders rose in February for the first time in seven months, and a rebound in China's official purchasing managers' index (PMI) in March showed the Chinese economy may have bottomed, China's chief statistics official said on Friday.
European shares rose in afternoon trade on Friday after the jobless numbers released were in line with forecasts.
The dollar reversed earlier losses and rose to a session peak against the euro on Friday as the U.S. jobs data dulled market optimism and enhanced the dollar's safe haven status.
(Additional reporting by Robert Gibbons in New York and Fayen Wong in Perth; editing by James Jukwey)