Weaker-than-expected US non-farm payroll data sent the dollar index to its lowest since mid-May, boosting crude prices, as a decline in the US dollar makes oil cheaper for holders of other currencies.
But the numbers were also negative for the US economy and therefore negative for oil, leading to the "push-pull" in the market, brokers said.
Brent crude futures were trading at $49.66 per barrel by 10:21 a.m. ET (1421 GMT), down 38 cents, but still almost double January lows and on track for its eighth weekly gain in nine weeks.
US West Texas Intermediate (WTI) crude futures were down 39 cents at $48.80.
The positive tone of the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna on Thursday soothed concerns over an intensified battle for market share between rivals Saudi Arabia and Iran.
"Overall, the outcome of the OPEC meeting can be interpreted as supportive from the perspective that none of the major players (except Iran) indicated that they would be further flooding the market with oil anytime soon," said Energy Management Institute analyst Dominick Chirichella.
Supply disruptions around the world, particularly in Nigeria, Venezuela, Libya and Canada, were also hastening a return to balance. On Friday, militants in the restive Niger Delta region that accounts for more than half of Nigeria's oil production claimed three new attacks on oil infrastructure, promising to bring Nigeria's oil production to "zero."
A big driver of the rebalancing in global oil markets is falling US shale output, and data from the US Energy Information Administration on Thursday showed a further decline in production last week.
Still, analysts have said it would take more time for the full extent of the rebalancing to be felt.
Oil fundamentals should shift into a supply deficit in the third quarter, and very large accumulated oil inventories should take more than a year to 'normalize,' Credit Suisse wrote in a note on Friday.
Bank of America Merrill Lynch said "seasonal dynamics, as well as robust trend gasoline consumption growth in the US, India, and even China" were supportive.
Fuelled by lower oil prices, consumers are driving and flying more, boosting consumption of gasoline and jet fuel.
EIA data on Thursday also showed larger-than-expected drops in stocks of gasoline and distillates, pointing to strong consumption and exports.
Supply disruptions around the world, particularly in Nigeria, Venezuela, Libya and Canada, were also hastening a return to balance
Oil prices were slightly lower but Brent crude held around $50 a barrel in choppy trading on Friday on signs the market was moving back to more balanced supply and demand, and on an OPEC meeting viewed as supportive.
