Oil prices seesawed near flat on Friday as markets weighed the weak dollar and Middle East violence against disappointing US payrolls data. Crude initially tumbled after US May nonfarm payrolls posted the weakest reading since September and the US jobless rate rose to 9.1 per cent. Prices later retraced some of the earlier losses as the dollar tumbled, giving a boost to some dollar-denominated commodities. Brent crude for July delivery dipped 9 cents to US$115.45 a barrel by early afternoon, after having fallen as low as $113.40. US July crude fell 63 cents to $99.78 a barrel, recovering from its $98.12 low and pushing back above its 100-day moving average of $99.58. "The dollar is weak and equities bounced back some and the initial shock from the jobs report wore off," said Dan Flynn, analyst at PFGBest Research in Chicago, as crude pushed off early lows. "The Middle East and Yemen especially will make people cautious about being too short going into the weekend." Traders were watching the growing violence in Yemen, a small oil producer on the Arabian Peninsula that borders top OPEC exporter Saudi Arabia. Shells struck Yemeni President Ali Abdullah Saleh's palace in Sanaa, slightly wounding Saleh and three other senior officials. Syrian forces opened fire to disperse demonstrators in several parts of the country, residents said, and protesters defied a widespread military crackdown as they demanded the ouster of President Bashar al-Assad. Markets are also awaiting next week's OPEC meeting. Some OPEC sources have indicated the producer group could raise output targets at their meeting, although Ali Al-Naimi, Saudi Arabia's oil minister, took a cautious tack on Thursday, repeating previous comments that OPEC would lift production if there was more demand for crude. Analysts will be looking to see if any change only codifies estimates of current production above targets, or suggests an actual output boost. The International Energy Agency (IEA), advisor to 28 industrialized countries, reiterated on Friday its call for OPEC to boost output to pull oil prices further lower. "There is a need for more oil in the market, and we hope producing countries are reading the market signals in the way we are," Fatih Birol, chief economist for the IEA, told Reuters. "We are already seeing the impact of high oil prices in the U.S. and China," Birol said, adding that U.S. economic data was showing slower growth rates while inflationary pressure in China was on the rise.
