Oil prices seesawed on Friday turning positive on better than expected U.S. jobs data, which eased fears about global economic recovery that led to a 10-percent price crash the previous day.
A report on U.S. payrolls showed private jobs had increased the most in 11 months, beating analysts' expectations and spurring an upturn in oil prices.
But the report also supported the dollar, which hit session highs against the euro and the yen, dampening oil market gains.
Oil higher was the initial effect - seems there is a fight between oil and the dollar to go higher, said Thorbjoern Bak Jensen, an analyst at Global Risk Management.
Brent crude shed just over $5 in the early hours of trade but recovered after the U.S. jobs data, trading 35 cents lower at $111.14 a barrel at 1358 GMT.
U.S. crude futures were 15 cents lower at $99.65 a barrel, up from as low as $95.25 a barrel earlier in the session.
This is the first positive data point in several days. To the extent it gives further lift to the dollar, commodities will continue to come under pressure, said John Kilduff, partner at Again Capital LLC in New York.
Goldman Sachs, which in April predicted this week's major correction in oil prices, said on Friday oil could surpass recent highs by 2012 due to supply tightness, contributing to the recovery ahead of the jobs data.
The Wall Street bank, seen as one of the most influential in commodities business, said it did not rule out a further limited decline in oil prices in the short term.
SELL OFF CONTINUES
Thursday's drop was the second biggest on record for Brent, with prices falling by more than $10. At one point, it was down $12, potentially the biggest one day drop ever.
After a fifth consecutive session of losses, more than $15 had been wiped off the market since last week's close.
The instinct is to liquidate. Even if you are a bull, you need to have deep pockets to ride this out, said one Singapore-based trader.
Oil again suffered the deepest losses amid widespread selling of silver, industrial metals and grains on Friday, as funds liquidated positions and others bet on further losses as prices lurched lower, only to whip back in matters of minutes.
Brent crude tumbled as much as 5.1 percent to a low of $105.15 per barrel early in the session, but by 1000 GMT, had recovered to $108.82, a loss of 1.8 percent.
The scale of Thursday's fall left many analysts scrambling for an explanation in the absence of any single factor that appeared to have triggered the sell-off.
There is no way that daily economic data has the power to cut $10 out of oil in one go, said The JBC Energy Research Center, adding the most important single reason for yesterday's sell-off simply appears to be that a sell-off was due.
Traders also said the slide did not appear to have been caused by any obvious change in the fundamental outlook.
It seems it's all been driven down since Osama (bin Laden) got shot, but I don't see that as particularly bearish myself. I don't see what difference it makes, to be honest, said a trader at an oil major.
Unrest across Arab nations had helped spur investors to pile into oil since the start of the year, driving Brent to a 2-1/2 year high of $127 last month.
The fear premium is reducing as the memory effect cuts in and people are used to the Middle Eastern situation... Investors think oil has finished its run and are looking for performance elsewhere, said another trader at an oil major.
(Additional reporting by Francis Kan; editing by James Jukwey)