* US jobless claims fall, buoy jobs recovery hopes
* Euro off 10-month low against dollar ahead of EU summit
* Coming up: CFTC trade data on Friday
(Updates prices, recasts, adds detail, market activity,
changes dateline from LONDON)
By Edward McAllister
NEW YORK, March 25 (Reuters) - Oil rose above $81 a barrel
on Thursday as the U.S. dollar weakened and a fall in U.S.
jobless claims brightened hopes of economic recovery in the
world's largest oil consumer.
The number of U.S. workers filing for jobless aid fell
sharply last week, according to the Labor Department, and a
gauge of underlying labor market trends hit its lowest in 1-1/2
years, signaling that the economy could be on the verge of
creating jobs. []
Meanwhile, the euro rose from a 10-month low against the
U.S. dollar on Thursday ahead of a summit meeting of European
leaders in Brussels to discuss possible aid for
heavily-indebted Greece. [] Some positive comments from EU
leaders ahead of the group's summit helped the euro to recover.
[]
A weaker dollar signals investors moving out of the dollar
and into assets deemed riskier such as commodities and
equities, which helps support crude prices.
U.S. crude for May delivery <CLc1> rose 50 cents $81.11 a
barrel by 12:35 p.m. EDT (1635 GMT). ICE London Brent for May
<LCOc1> rose 47 cents to $80.09.
"Investors were watching Brussels today -- and will
continue to focus on it tomorrow -- in the hope that some
concrete type of assistance will be thrashed out over the
sovereign debt issue," said Peter Beutel, president of Cameron
Hanover, in New Canaan, Connecticut.
EU leaders hold what is likely to be a tense and difficult
summit on Thursday, divided over how to help heavily indebted
Greece and struggling to maintain confidence in the euro.
[]
Wall Street extended gains in late morning trade on
Thursday, pushing the Nasdaq up more than 1 percent amid
optimism about earnings.
Oil prices fell on Wednesday after mixed U.S. data showed a
larger-than-expected build in crude stocks but a fall in oil
product inventories, leaving lingering doubts over the strength
of demand recovery in the world's largest energy user. []
But oil prices failed to break below the recent trading
range, allowing some recovery on Thursday.
"There is a stickiness keeping prices above $80," said
Amrita Sen, analyst at Barclays Capital.
"I think the inventory data was pretty neutral. The
headline figure on crude was bearish for the oil price but the
product numbers were pretty strong."
Oil inventories at the key U.S. Cushing, Oklahoma, crude
oil hub rose by 754,739 barrels to 31.8 million barrels in the
week to March 23, according to a report from energy industry
data provider Genscape released on Thursday. []
Demand for crude in Europe weakened sharply in January,
down by 1.55 million barrels per day from a year earlier,
Barclays Capital said, citing data published by the Joint Oil
Data Initiative (JODI).
Economic data in the euro zone painted a mixed picture,
with manufacturing activity growing in March at its highest
level since the end of 2006, but industrial orders in January
fell, underscoring the fragility of the economic recovery.
[] []
Japan's commercial crude inventories rose 4 percent last
week to their highest level in almost eight months, industry
data showed on Thursday, ahead of scheduled refinery
maintenance in the coming months. []
(Additional reporting by Gene Ramos and Robert Gibbons in New
York, Joe Brock in London, Alejandro Barbajosa in Singapore;
Editing by Lisa Shumaker)
