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* Weak jobs, factory data dent hopes of quick US rebound
* OPEC likely to keep output targets at next week's meeting
* Nigerian unrest may offer price support
By Jennifer Tan
SINGAPORE, May 22 (Reuters) - Oil hovered above $61 a
barrel on Friday, down from Thursday's six-month highs, as
disappointing jobs and factory data dented hopes that the
economy of the United States, the world's top energy user, was
set for a quick rebound.
U.S. data on Thursday signalled that the road to recovery
for the economy would be long and bumpy, after a key
manufacturing index showed only marginally less weakness and
unemployment looked set to hit double-digit levels.
Sentiment was further pummelled by fears that the United
States could lose its coveted triple-A credit rating.
U.S. crude <CLc1> for July delivery was up 52 cents at
$61.57 a barrel by 0245 GMT, after falling 1.6 percent to
settle at $61.05 on Thursday. It had hit a six-month high of
$62.26 in post-settlement trade the previous day, and is up 9.3
percent so far this week.
London Brent <LCOc1> was up 57 cents at $60.50.
"I think the market has got ahead of itself -- we've talked
about 'green shoots' of recovery in the economy, but the
reality is that it's going to take time to get traction," said
Peter McGuire, Managing Director of Commodity Warrants
Australia.
"Crude has risen about 85 percent in the last three months,
and it's not likely to go much further in this economic climate
-- we're probably going to see a $55 to $65 range over the next
couple of weeks," he added.
The Philadelphia Fed's closely watched indicator of factory
activity in the Mid-Atlantic region rose by a fraction in May,
with contraction more than markets had expected.
[]
The U.S. Labor Department also reported that initial
jobless claims last week fell for the third time in four weeks,
but continuing claims hit a 16th consecutive record high.
The reports come a day after the Federal Reserve, in
minutes released from its April policy meeting, said a full
U.S. recovery could take five or six years.
Ratings agency Standard & Poor's warning that it could cut
its top AAA credit rating on the UK also stoked worries that
the United States could face a similar fate. []
U.S. stocks saw a broad sell-off on Thursday, and the
dollar hit a two-month low against the yen on Friday, as
investors worried about the U.S. budget deficit, exited
dollar-denominated assets. [] []
Oil has been on an upward trend since mid-April in an
equity-led rally. Prices have recovered from below $33 in
December after a plunge from record highs above $147 in July.
It got another boost on Wednesday after weekly U.S.
government inventory data showed a steep drop in crude and
gasoline stockpiles ahead of the U.S. Memorial Day weekend,
traditionally the start of the summer driving season. []
On the supply front, the Organization of Petroleum
Exporting Countries, which has agreed to cut 4.2 million
barrels per day of output since September to prop up prices,
will meet again on May 28 to decide on supply.
But OPEC is likely to keep output targets steady as
stronger oil demand in coming months could cut brimming
inventories, a senior Gulf OPEC delegate told Reuters.
[]
Eleven of 12 oil analysts and economists surveyed by
Reuters also saw OPEC maintaining its output target.
[]
Unrest in OPEC member Nigeria, Africa's top oil and gas
exporter, could provide some price support.
Nigeria last week launched its biggest military offensive
for years in the western Niger Delta, bombarding militant camps
and using troops to flush rebel fighters out of local
communities.
But Minister of State for Petroleum Odein Ajumogobia told
Reuters the country' oil output was still broadly unchanged
around 1.6 million barrels per day (bpd). []
(Editing by Clarence Fernandez)
