* U.S. jobless claims fall, supportive for oil
* Dollar dips, spurs risk appetite for commodities
* Coming Up: U.S. preliminary Q2 GDP; 1230 GMT Friday
(Recasts, updates prices, market activity, new by-line,
changes dateline, previously LONDON)
By Gene Ramos
NEW YORK, Aug 26 (Reuters) - Oil rose for a second day on
Thursday, supported by a modest improvement in U.S. jobs data
and a weaker dollar.
Oil was up about 1.5 percent past midday, extending a rally
from Wednesday after the U.S. Labor Department reported that
first-time claims for unemployment benefits fell more than
expected last week, though the four-week filings average rose
to the highest level since late November.[]
Benchmark U.S. crude futures for October <CLc1> traded at
$73.61 per barrel, up $1.09, by 1:30 p.m. EDT (1730 GMT) after
reaching a high of $73.98.
ICE Brent <LCOc1> gained $1.67 to $75.15.
Later month contracts gained even more than October, in
reaction to bloated inventories, analsyts said.
"The contango is widening and that is a logical reaction to
inventories building up so much as it is more economical to
store," said Dominick Chirichella, senior partner at Energy
Management Institute in New York.
Benchmark crude rose more than 1 percent on Wednesday after
touching $70.76, the lowest front-month price since early June,
as the market shrugged off data showing U.S. crude and product
supplies rose last week to post a new high. []
The dollar <.DXY> fell against a basket of currencies. A
weaker dollar often supports crude, which is priced in the U.S.
currency.
"The dollar's weakness is lending support to crude futures
today and gains reflect a follow-through from the breakout from
11-week lows yesterday," said Tom Knight, trader at Truman
Arnold, in Texarkana, Texas.
"This is a technical bounce after recent weakness (and) an
improved cash market in the Gulf Coast, due to ongoing refinery
turnarounds, is also helping in this relief rally," he added.
Front-month U.S. crude futures' 14-day relative strength
index (RSI) fell to just 30 on Tuesday, a technical pointer to
oversold conditions, but has since bounced to around 40,
Reuters data showed, partly on profit-taking from short
positions.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the 14-day RSI for U.S. crude:
http://link.reuters.com/fuc57n
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However, oil's two-day gain "has all the hallmarks of an
upside correction or retracement in an otherwise falling
market," brokers at PVM Oil Associates in London said.
Wall Street turned flat after early gains as enthusiasm
from the jobless claims data waned. []
Markets were also watching central bankers from around the
world, gathering at the Jackson Hole, Wyoming, mountain resort
to assess the darkening economic outlook.
In a speech scheduled for Friday, U.S. Federal Reserve
Chairman Ben Bernanke is likely to discuss the uncertain
prospects for the economy, but is not expected to give many
clues about whether the Fed will pump more cash into the U.S.
economy. []
Also being awaited, the U.S. government on Friday is
expected to revise second-quarter gross domestic product growth
lower to an annual pace of 1.4 percent from 2.4 percent,
according to a Reuters survey.
The U.S. Energy Information Administration on Wednesday
said U.S. crude and product inventories all rose last week. In
total, commercial crude and product stocks rose to 1.139
billion barrels, topping the record weekly high of 1.13 billion
barrels set in the week to Aug. 13. []
(Additional reporting by Robert Gibbons in New York;
Christopher Johnson in London; Alejandro Barbajosa in
Singapore; Editing by David Gregorio)
