World oil prices eased on Monday as traders took profits after briefly surging to a one-year peak above 79 dollars per barrel on demand recovery hopes and the weak dollar, traders said.

New York's main contract, light sweet crude for November delivery, sank 47 cents to 78.06 dollars a barrel, having earlier spiked to 79.05 shortly after midnight. That was the highest intra-day level in one year.

Elsewhere, Brent North Sea crude for December delivery reversed 44 cents to reach 76.55 dollars.

Despite Monday's slight falls, New York crude oil remains close to a one-year peak as the market is boosted by hopes of recovering worldwide economic growth -- and demand for energy.

"Crude oil is currently trading just under 79 dollars a barrel on speculation demand will increase as the global economy recovers from recession," said BetOnMarkets analyst David Evans.

"Last week, oil futures posted their biggest weekly gain in almost two months as US refiners cut operating rates to a six-month low to clear gasoline and distillate stockpiles."

Oil prices had risen for a seventh straight session on Friday, powered by a jump in industrial production in the United States, rising tensions in oil-rich Nigeria and the flagging US currency.

Later Monday, traders will digest the latest US company results for a handle on the pace of US economic recovery.

"Market participants will be keeping an eye on more US earning results that could be a key element for crude oil direction," said analysts at the Sucden Financial Research brokerage.

Apple and Texas Instruments are scheduled to report quarterly earnings later today, while and Caterpillar and Coca-Cola report their results on Tuesday.

London-based energy consultancy CGES on Monday warned that the oil market was "vulnerable" to "misreading" the signals about the strength of a possible global economic recovery.

"The world appears to be coming out of recession, but growth remains fragile and patchy," the influential Centre for Global Energy Studies (CGES) said in a monthly report.

"Governments have pumped unprecedented amounts of money into the global economy and will need to carefully manage the endgame of the stimulus.

"Oil prices are being driven by wider economic forces and remain vulnerable to the misreading of economic signals," it added.

Prices have surged in recent sessions, fuelled by a slumping dollar that has boosted investors' appetite for hard assets such as oil and other commodities as they seek to protect their wealth from the falling US unit.

A struggling greenback makes dollar-priced crude cheaper for buyers holding stronger currencies, which tends to stimulate demand.

The European single currency hit a 14-month high of 1.4968 dollars last Thursday.

"Oil prices are likely to test the 80 dollars per barrel mark this week," predicted BetOnMarkets analyst Evans, who added that "euro/dollar is poised to break through the 1.50 mark."