Oil fell towards $111 a barrel on Friday after U.S. Federal Reserve officials indicated they may at least slow a stimulus programme this year, threatening the economic recovery in the world's biggest fuel consumer.
Some of crude's losses were pared after a key U.S. jobs report showed the pace of hiring by employers had eased slightly in December, but hinted at momentum in the labour market's recovery from the 2007-09 recession. [ID;nL1E9C3AA1]
Signs of hesitation within the Fed about more increases to the central bank's $2.9 trillion balance sheet had boosted the dollar and weighed on crude in earlier trade, with Brent falling to a session low of $110.38.
"A much firmer U.S. dollar and speculation about an earlier end to Fed bond purchasing are putting oil prices under pressure," said a Commerzbank research note.
By 1439 GMT, Brent crude was trading down 77 cents to $111.37. U.S. crude was off 29 cents at $92.63.
While the Fed said it would keep buying bonds to boost the economy over the coming months, minutes of a December meeting showed some officials are growing concerned about the programme's potential risk to financial markets.
Several thought it would be appropriate to slow or stop asset purchases well before the end of 2013.
Putting a floor under oil, Thursday's figures from the American Petroleum Institute showed a steeper-than-expected drop of 12 million barrels in crude inventories in the week to Dec. 28. Analysts were expecting a 900,000 barrel draw.
Data from the U.S. Energy Information Administration is due later on Friday. (Additional reporting by Florence Tan in Singapore; editing by Jason Neely and Keiron Henderson)