Oil climbed more than $1 on Friday, holding near $94 a barrel as concerns about tight supplies in the run up to winter prevented a major sell-off.
Investors still see oil as an attractive proposition, but its march towards $100 is making them cautious about the potential for further gains.
U.S. crude rose 64 cents to $94.13 a barrel by 9:22 a.m. EDT.
Brent crude was up 89 at $90.61, off its record high of $91.71 from the previous session.
You could see people wanting exposure to strong oil and commodity markets if there is a potential for a correction in equities because of concerns about a U.S. slowdown, said Harry Tchilinguirian, senior oil market analyst at BNP Paribas.
But he said concern that oil, which struck a record $96.24 on Thursday, was near its peak would make investors wary.
People may be cautious right now in going long into (oil) futures, he said. We are in a zone of $92-$95 and there has to be a break-out either way. The question is have we topped out or are we going to cross $100.
Oil prices have risen 40 percent since mid-August, driven by expectations of tighter supplies this winter, a weak dollar and an inflow of money into commodities as a global credit squeeze has riled other markets.
Fears that the credit market crisis could put more pressure on the fragile U.S. economy helped push European equities lower initially on Friday.
But latest U.S. employment data released on Friday was reassuring.
U.S. employers added a surprisingly strong 166,000 new non-farm jobs in October, well ahead of forecasts, according to a government report.
Supply worries continue to support prices, especially as oil demand growth from emerging economics such as China and India is not expected to cool even if the U.S. economy slows down.
The U.S. Energy Information Administration (EIA) administrator Guy Caruso said that if OPEC did not crank up production, markets would be short of oil early next year.
The Organization of the Petroleum Exporting Countries, which supplies more than a third of the world's oil, rejects any talk of supply tightness and blames speculators, political tensions and a weak dollar for driving up the cost of fuel.
OPEC in September agreed to boost supplies by 500,000 barrels a day from November 1, but has resisted consumer calls for any more oil.
The group increased oil production in October, ahead of the
November 1 increase, a Reuters survey showed.
The 10 OPEC members bound by output targets, all except Iraq and Angola, pumped 26.98 million barrels a day, up 180,000 bpd from September.
OPEC heads of state are due to meet in Riyadh this month.
(Reporting by Santosh Menon and Jane Merriman in London, and Felicia Loo in Singapore)