UPDATE 7-Crude futures slip in volatile end-quarter trading

* Russia says battalion withdrawing from near Ukraine border

* Yellen defends Fed policies, cites slack U.S. labor market

(Updates prices, adds context on Russia, Libya, Nigeria)

NEW YORK, March 31 (Reuters) - Crude futures dipped in volatile end-of-quarter trading on Monday, pressured by news Russia was withdrawing some troops on the Ukrainian border and concerns about the struggling U.S. labor market voiced by Federal Reserve Chair Janet Yellen.

"Any sign that tensions might ease in the Russia-Ukraine situation is going to be bearish," Phil Flynn, analyst at Price Futures Group in Chicago, said.

Crude futures had seesawed before being weighed down by news that Russia is withdrawing a motorized infantry battalion from a region near Ukraine's eastern border, according to a Russian Defence Ministry spokesperson quoted by state news agencies.

U.S. April RBOB gasoline and heating oil pushed lower as both refined products contracts approached expiration on Monday.

Janet Yellen, in her first public speech since taking the reins at the Fed, said on Monday the U.S. central bank's "extraordinary" commitment to boosting the economy, especially the still struggling labor market, will be needed for some time to come.

"I think Fed's Janet Yellen saying that the US economy needs support for some time, may have caused the market to come off," said a New York-based broker.

Gasoline futures, as well as crude oil, are sensitive to concerns about the U.S. labor market.

But other market participants thought Yellen's defense of the Fed's easy money policies should be supportive to commodities because of the boost to liquidity provided by the central bank's bond buying.

Brent crude for May delivery was down 27 cents at $107.80 a barrel at 1:09 p.m. EDT (1709 GMT), having earlier fallen to $107.05 after reaching $108.33.

U.S. May crude was down 20 cents at $101.47 a barrel, having moved from $100.88 to $101.97.

Also helping keep oil prices in check on Monday was news Iraq has started production at the giant West Qurna-2 field, moving closer to its output target of 4 million barrels per day (bpd) this year.

Front-month U.S. crude was on track to post a three percent gain for the quarter.

But Brent was set to post a 2.5 percent loss for the quarter, after two consecutive quarterly gains, as rising supply from Iraq and increased exports from Iran have offset supply disruptions in Libya and Nigeria.

Libya is pumping a little over 160,000 bpd of crude oil, about one tenth of pre-civil war production, and gas exports to Italy are flowing normally but a condensates pipeline from the Wafa field is closed, a spokesman for state-run National Oil Corp (NOC) said on Monday.

Nigerian crude exports are set to fall to their lowest since 2009 due to a production outage for the Forcados grade.


Earlier on Monday, crude oil prices were supported by ongoing worries about the crisis in the Ukraine.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held talks on Sunday about ways to defuse the crisis over Ukraine, with Kerry telling Moscow progress depended on a Russian troop pullback from Ukraine's borders.

The West is considering more sanctions on Russian industries including its oil and gas sector after the annexation of Crimea, and Russian military manoeuvres close to Ukraine's borders are keeping investors on edge.

Investors worry that sanctions could lead to a disruption of Russian energy supplies, on which Europe relies heavily.

"Russian supply risks are keeping the market on edge," said Carsten Fritsch, senior commodities analyst at Commerzbank.

"It would be impossible to replace Russian oil and gas in the short term, and it would be economic suicide for Europe to jeopardise those supplies. That's why the risks of any disruption are probably very low."

(Additional reporting by Christopher Johnson in London and Florence Tan in Singapore; Editing by Jason Neely, Bernadette Baum and Diane Craft)