UPDATE 10-Oil surges 6 pct to $51 on Fed plan, weak dollar

                                
 * Oil touches highest level since Dec. 1
                                
 * U.S. dollar declines after falling most since 1985
                                
 * Saudi Arabia says hopes for gradual rise in oil prices
 (Updates throughout, changes dateline from LONDON)
                                
 NEW YORK, March 19 (Reuters) - Oil jumped more than 6
percent on Thursday to top $51 a barrel after the U.S. Federal
Reserve announced a new plan to fight recession and a weak
dollar boosted the appeal of commodities to investors.
                                
 U.S. crude <CLc1> rose $3.06 to $51.20 a barrel by 1304
p.m. EDT (1704 GMT), having earlier traded as high as $52.25,
the highest since Dec. 1, 2008. London Brent <LCOc1> rose $2.86
to $50.52 a barrel.
                                
 "It's all about the Fed move," said Tom Knight of Truman
Arnold. "(The) weaker dollar supports higher dollar-denominated
oil (and other commodity prices) and fuels inflation fears,
too."
                                
 The Fed said on Wednesday it will purchase $300 billion of
long-dated Treasuries over the next six months, its first
large-scale purchases of government debt since the early 1960s,
while also boosting buying of mortgage-backed securities and
agency debt in its bid to rescue the economy.
                                
 The U.S. dollar extended a sharp sell-off on Thursday, a
day after posting its biggest one-day loss against a basket of
currencies since at least 1985. [ID:nN19429129]
                                
 The lower dollar supported other commodities, with the
Reuters-Jefferies CRB index <.CRB>, a global commodities
benchmark, hitting a five-week high Thursday. [ID:nN19397036]
                                
 The slumping global economy has battered oil demand,
sending crude prices tumbling from record highs over $147 a
barrel in July.
                                
 The International Monetary Fund on Thursday forecast the
world economy will contract in 2009 for the first time since
World War Two by between 0.5 percent and 1.0 percent.
[nWEQ000800]
                                
 Oil eased from intra-day highs after U.S. jobs data showing
a record high in the number drawing state unemployment benefits
highlighted the extent of the downturn in the world's top oil
consumer. [ID:nN19420406]
                                
 The Organization of the Petroleum Exporting Countries on
Sunday pledged to comply more strictly with deep supply curbs
agreed last year as part of efforts to balance markets and
support prices.
                                
 Saudi Arabian Oil Minister Ali al-Naimi, the group's most
influential voice, said on Wednesday he believed OPEC had
managed to put a floor under the market. [ID:nWLA0166]
                                
 "I think OPEC has succeeded in stabilising prices," he
said. "The next thing is to hope for a gradual improvement in
prices over time."
                                
 UK consultancy Oil Movements said in its latest weekly
estimate that OPEC seaborne oil exports, excluding Angola and
Ecuador, will fall to the lowest level since September 2003 in
the four weeks to April 4. [ID:nWLA0297]
 (Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York, Alex Lawler in London and Fayen Wong in Perth;
Editing by Christian Wiessner)