NEW YORK - Oil prices fell to over three-week lows on Friday in a volatile session, after strong U.S. jobs data raised concerns about higher interest rates and as investors sought more clarity on the imminent EU embargo on Russian refined products.

Brent crude futures fell $2.23, or 2.7%, to $79.94 a barrel, after rising to a session high of $84.20. It hit a session low of $79.72, its lowest since Jan. 11.

U.S. West Texas Intermediate crude (WTI) ended down $2.49, or 3.3%, at $73.39, after trading between $78.00 and $73.13, its lowest since Jan. 5.

Brent registered a 7.8% decline this week while WTI dropped 7.9%.

U.S. job growth accelerated sharply in January amid a persistently resilient labour market, but a further moderation in wage gains should give the Federal Reserve some comfort in its fight against inflation.

"The market can't decide whether it should be nervous about a recession or more worried about the Federal Reserve being aggressive with interest rates," said Phil Flynn, analyst at Price Futures Group.

The U.S. central bank on Wednesday scaled back to a milder rate increase than those over the past year, but policymakers also projected that "ongoing increases" in borrowing costs would be needed.

Increases in interest rates in 2023 are likely to weigh on the U.S. and European economies, boosting fears of an economic slowdown that is highly likely to dent global crude oil demand, said Priyanka Sachdeva, market analyst at Phillip Nova.

European Union countries agreed to set price caps on Russian refined oil products to limit Moscow's funds for its invasion of Ukraine, the Swedish presidency of the EU said on Friday.

EU diplomats said the price caps are $100 per barrel on products that trade at a premium to crude, principally diesel, and $45 per barrel for products that trade at a discount, such as fuel oil and naphtha.

The Kremlin said the EU embargo on Russia's refined oil products would lead to further imbalance in global energy markets.

Meanwhile, ANZ analysts noted a sharp jump in traffic in China's 15 largest cities after the Lunar New Year holiday but said that Chinese traders had been "relatively absent."

In U.S. supply, energy firms this week cut the number of oil and natural gas rigs by the most since June 2020, energy services firm Baker Hughes Co said. U.S. oil rigs fell 10 to 599 this week, their lowest since September, while gas rigs dropped by two to 158.

The U.S. Commodity Futures Trading Commission said on Thursday that as a result of the ransomware attack on ION Trading UK, the CFTC's weekly Commitments of Traders report will be delayed until all trades can be reported. CFTC reports provide a snapshot of investor positioning on various assets, including oil.

(Reporting by Stephanie Kelly in New York; Ahmad Ghaddar and Swati Verma in London, Sonali Paul in Melbourne and Jeslyn Lerh in Singapore Editing by Marguerita Choy and Susan Fenton)