* Dollar may strengthen further on euro zone debt concerns
* Nigerian output eyed after death of president
* Coming up: U.S. jobless claims; 1230 GMT
* For a technical view, click: []
SINGAPORE, May 6 (Reuters) - Oil rebounded above $80 a
barrel on Thursday, halting two straight days of sharp drops,
supported by the weaker dollar and expectations of a rosier
picture for the U.S. economy.
The dollar fell 0.15 percent against a basket of currencies
as the euro took a breather after sliding to a one-year low
against the dollar on Wednesday as fears that the euro zone
debt problems could spread spooked investors. []
[]
U.S. crude for June delivery <CLc1> rose 21 cents to $80.18
a barrel by 0309 GMT.
The contract dived more than 3 percent on Wednesday to
below $80 a barrel for the first time in six weeks after U.S.
government data showed crude stocks at the key storage hub in
Cushing, Oklahoma, rose 1.6 million barrels to a record of 36.2
million barrels.
London Brent crude <LCOc1> rose 17 cents to $82.78 a
barrel.
"The market is expected to recover slightly today after
sharp declines of $6 to $7 over the past few days," said Ken
Hasegawa, a commodities sales manager at brokerage Newedge
Japan.
Oil has seen strong support at $79, but prices may be
capped at $82 on Wednesday, he said.
"We have to be careful how the euro will perform in the
next few weeks," Hasegawa said.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a technical chart, see:
http://graphics.thomsonreuters.com/gfx/WT_20100605084529.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Analysts have said the euro is expected to remain weak as
investors remain highly sceptical Greece will be able to carry
out the tough austerity measures it promised in return for a
110 billion euro aid package from the European Union and the
International Monetary Fund. []
A weaker dollar makes oil cheaper for holders of other
currencies.
NIGERIA, U.S. DEMAND MAY SUPPORT
News of the death of Nigerian President Umaru Yar 'Adua may
create more uncertainty about the country's oil production.
Nigeria has always been a supportive factor to crude prices
as its production is often disrupted by militant attacks on
pipelines, but political instability may lend more support to
oil, Hasegawa said.
Yar 'Adua's death may pave the way for the most hotly
contested succession since the world's 15th largest oil
producer returned to democracy a decade ago. []
Analysts are also watching the U.S. jobless claims data due
later on Thursday for further confirmation that the economy
recovery is on track to boost oil demand.
Signs of a recovery in the labour market grew as reports on
Wednesday showed job growth among private firms and plans for
layoffs falling to their lowest in four years. []
Latest U.S. weekly oil data showed gasoline demand hit a
record high for any April, while diesel consumption has started
to recover, analysts at Barclays Capital said in a note.
Still, Energy Information Administration data showed
gasoline stocks rose 1.2 million barrels to 224.9 million
barrels, well above analysts' forecasts.
"It does finally look as if diesel demand is beginning to
join the path that the macroeconomic data implied it had to
sooner or later," the bank said.
However, the massive oil spill from the Macondo prospect in
the U.S. Gulf is likely to be damaging to the industry in the
medium and long term, Barclays said.
Workers toiled above and below the surface of the Gulf of
Mexico on Wednesday in attempts to plug a gushing oil leak and
protect the U.S. coast in one of the biggest spill containment
efforts ever mounted. []
(Editing by Ramthan Hussain)
(florence.tan@thomsonreuters.com; + 65 6870 3497; Reuters
messaging: florence.tan.thomsonreuters.com@reuters.net))
