LONDON-- Oil slipped below $80 a barrel on Friday, in line with timid gains across financial markets as dealers awaited monthly U.S. jobless data, expected to show a slow-down in rising unemployment in the world's biggest economy.

U.S. crude for December delivery was up 5 cents to $79.67 a barrel by 1214 GMT, retracing early gains after climbing as high as $80.34 in the trading session.

London Brent crude rose 13 cents to $78.12.

Government figures for release at 1330 GMT were expected to show employers in October cut payrolls by 175,000 jobs, the smallest amount for 14 months, although the jobless rate likely rose to a 26-year high of 9.9%, according to a Reuters survey.

The labour market in the world's largest oil consumer will be closely watched to gauge the durability of a government stimulus-driven recovery that began in the third quarter and probably ended the worst U.S. recession since the 1930s.

A higher-than-expected jobless rate or a bigger loss of jobs than forecast could rattle investors on Wall Street, and send them fleeing into the safer havens of U.S. government bonds and the U.S. dollar and away from riskier assets like oil.

"If it gets down to 100,000 then we might have a good old rally. But if it's up around 200,000 like some of the more glum are saying, we might come off," said Rob Montefusco, an oil trader with Sucden Financial in London.

Oil prices have risen from a low of less than $33 a barrel last December to a high for this year of $82 in October.

They are on course to gain nearly 4% this week, but market sentiment is still cautious following inventory data that has shown oil stocks are very high.

Stores of distillates, which include heating oil and diesel are near their highest levels in 26 years.

"In the worst case, today's figures will unveil that unemployment has risen to levels above the symbolic threshold of 10%," analysts at JBC Energy wrote.

"A one percentage point increase in the U.S. employment rate will reduce gasoline demand over the coming year by about 0.75 percentage points, or around 70,000 (barrels per day)," JBC said, pointing to its own estimates.