By midday in Europe, benchmark crude for November delivery was down 15 cents at $78.38 in electronic trading on the New York Mercantile Exchange. Earlier in the session, it rose as high as $79.05. The contract added 95 cents to settle at $78.53 on Friday.

Last week, crude broke out of a five-month trading range between $65 and $75 a barrel on a weakening U.S. dollar and expectations that oil demand will eventually recover as the global economy grows next year. A growing economy increases demand for energy.

Despite several straight days of gains by oil prices, analysts remained cautious.

(AP) This is a Friday, July 17, 2009 file photo of a worker at the Nahran Omar oil refinery near...
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"The spectacular gains were overwhelmingly driven by financials and market optimism rather than fundamentals, said JBC Energy in Vienna. "We see no reason why prices should not return to the $65-$75 per barrel bandwidth."