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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
(Updates with prices, China)
By Jennifer Tan
SINGAPORE, May 22 (Reuters) - Oil hovered above $61 a
barrel on Friday, off six-month highs the previous day, 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 40 cents at
$61.45 a barrel by 0630 GMT, after falling 1.6 percent to
settle at $61.05 on Thursday. In post-settlement trade on
Thursday, it hit a six-month high of $62.26, and is up about 9
percent so far this week.
London Brent <LCOc1> was up 44 cents at $60.37.
"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 the
United States could face a similar fate. []
OPEC OUTPUT SEEN STEADY
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 concerned 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 hit a six-month peak 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. []
Some price support came from data showing China's apparent
oil demand rose by 3.9 percent in April from a year earlier,
its first significant rise since October last year.
Oil demand in China -- the world's second-largest energy
consumer -- has fallen in four of the last five months, and by
as much as 8.9 percent in January. []
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 the producer cartel is likely to keep output targets
steady as stronger oil demand in coming months may 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 underpin prices, although Minister of State for
Petroleum Odein Ajumogobia told Reuters the country's oil
output was still broadly unchanged at around 1.6 million
barrels per day (bpd). []
(Editing by Clarence Fernandez)
