* U.S. crude futures extend 2010 intraday peak to $85.22
* North Sea Brent crude oil jumps to over $84 barrel
* Investment inflows seen at start of new quarter
* Coming Up: U.S. non-farm payrolls for March on Friday
By Gene Ramos
NEW YORK, April 1 (Reuters) - Oil prices firmed at 18-month
highs on Thursday after upbeat U.S. economic data signaled
better oil demand ahead, attracting fund buying as the new
quarter began.
A dip in the dollar against the euro and a basket of
currencies also prompted buying, traders said.
Ahead of the long holiday weekend and with the key March
U.S. jobs report due on Friday, traders were also covering
short positions, helping push the market higher for the fourth
consecutive session, analysts said.
"This looks like a short-covering rally ... traders don't
want to go home with a lot of shorts, knowing the important
jobs data will be released on Friday, when the energy markets
are closed," said Richard Ilczyszyn, senior market strategist
at Lind-Waldock in Chicago.
Short positions are bets that prices will fall.
U.S. crude for May delivery <CLc1> was up $1.14 at $84.90
by 1:45 p.m. EDT (1745 GMT), off the session high of $85.22 a
barrel, the highest intraday price since Oct. 9, 2008. The
contract settled at $83.76 on Wednesday, its highest close
since October 2008.
London ICE Brent <LCOc1> climbed $1.63 to a high of $84.33
before easing a little to trade around $84.
The number of Americans filing new claims for jobless
benefits fell last week and factory activity in March hit its
highest level in more than 5-1/2 years, bolstering confidence
of a continued expansion in the economy. []
"Upward momentum is very strong," said Eugen Weinberg, head
of commodities research at Commerzbank in Frankfurt.
"Money is flowing into commodities at the beginning of the
new quarter from all sorts of investors, including funds," he
added.
The euro rallied against the dollar, lifted by quarterly
positioning as invesetors looked ahead to U.S. nonfarm parolls
data on Friday. The dollar also fell against a basket of
currencies. [] <DXY>.
JOBS FORECAST
Ahead of Friday's jobs data, the median projection from the
20 economists who have forecast payrolls most accurately over
the past year in Reuters' polls predicts 200,000 jobs were
created last month.
That is slightly higher than the 190,000 median forecast
from the broader sample of 82 analysts in the latest Reuters
poll. []
A rise would mark only the second time payrolls have risen
since the recession started in December 2007, although this
might be partly due to hiring for the 2010 census.
Oil markets have ignored Wednesday's government report of
the ninth consecutive weekly build in U.S. crude stocks, and a
surprise, if small, rise in gasoline supplies. []
U.S. government data showed U.S. crude inventories rose by
2.9 million barrels to 354.2 million barrels last week,
Gasoline stocks logged an unexpected 300,000 barrel gain.
"Many are looking at the fact that total implied refined
product demand is now in positive territory versus both last
year and the five year average for the same week," Dominick
Chirichella, senior partner, Energy Management Institute in New
York, said in a report.
"SIMMERING TENSIONS"
Simmering geopolitical tensions amid talk of a possible new
round of sanctions against Iran, maybe within weeks rather than
months, could be underpinning the market, said Edward Meir at
brokers MF Global.
But, "with respect to short-term pricing trends, we suspect
there might be a temporary pause in the rally," he added.
U.S. front-month crude oil rose 5.5 percent in the first
quarter, its fifth consecutive gain. But although it has more
than doubled from a December 2008 low, it is still well short
of a record high near $150 a barrel hit earlier that year.
After wild swings in the past two years, oil has stabilized
recently near the range favored by members of the Organization
of the Petroleum Exporting Countries between $70 and $80.
Last quarter, oil peaked at $83.95 a barrel in January to
as low as $69.50 in February, a range of less than $15.
(Additional reporting by Robert Gibbons in New York,
Christopher Johnson in London; Alejandro Barbajosa in
Singapore; Editing by Marguerita Choy; Editing by David
Gregorio)
