UPDATE 6-Oil surges toward $87 as U.S. economy recovers

                                
 * U.S. jobs, manufacturing boost growth hopes
                                
 * Analysts see prices rising further
                                
 * Trade thin, many Asian and European markets shut
 (Recasts, adds details and prices)
                                
 By Joshua Schneyer
                                
 NEW YORK, April 5 (Reuters) - Oil prices rose more than 2
percent on Monday to their highest since October 2008, after
data showed U.S. payrolls surged in March, the service sector
expanded and pending home sales grew, as the world's top energy
consumer emerges from an economic downturn.
                                
U.S. payrolls rose by 162,000 last month, the fastest rate
in three years, Labor Department data showed on Friday.
[ID:nN01126422]
                                
 The U.S. service sector grew in March at its fastest pace
in nearly four years while pending home sales also rose,
according to the ISM industry survey and a National Association
of Realtors report on Monday. [ID:nN05176113]
                                
 "Economic optimists have taken control of the market after
jobs data, manufacturing and pending home sales data all came
in better than expected," said Gene McGillian, analyst at
Tradition Energy in Connecticut. "We're in uncharted territory.
I think we can keep trending higher."
                                
 U.S. crude oil for May delivery <CLc1> rose $1.77 to $86.64
a barrel by 11:58 a.m. EDT (1558 GMT).
                                
 U.S. markets reopened after a three-day weekend including
the Good Friday holiday. London markets were closed on Monday
for Easter.
                                
 Brent crude <LCOc1> rose $1.69 to $85.70 per barrel.
                                
 U.S. equities rose while the dollar weakened against a
basket of foreign currencies and commodities gained broadly.
<.DXY> [.N]
                                
 OPEC members, including the world's largest crude exporter
Saudi Arabia, said last week at the International Energy Forum
in Cancun, Mexico, that they favored an oil price in the $70 to
$80 a barrel range. But OPEC, which pumps about a third of the
world's oil, has no immediate plans to revise output targets
and produce more crude even with oil near $85, a person
familiar with Saudi oil policy told Reuters last week.
[ID:nN30208773]  
                                
LITTLE RESISTANCE
                                
Technical analysts, who follow the movement of prices on
historical charts, have become more bullish and suggest the oil
market could move higher in the next few weeks.
                                
 "Our take on crude oil prices in the short-term is that we
likely will push higher from here," said senior commodities
analyst Edward Meir at brokers MF Global.
                                
 "Technically, there is very little resistance showing on
the charts given the upside breakout evident."
                                
 In industry news, U.S. Tesoro Corp said on Sunday crude oil
intake at its Anacortes, Washington, refinery was down to about
70 percent of its 120,000 barrel per day (bpd) capacity after a
deadly explosion and fire on Friday. [ID:nN04150304]
                                
 San Antonio-based Valero Corp <VLO.N> confirmed on Sunday
that it was the owner of a 2-million-barrel crude oil cargo
bound for the U.S. Gulf aboard the very large crude carrier
(VLCC) Samho Dream, which was hijacked on Sunday off the coast
of East Africa by Somali pirates.
                                
(Additional reporting by Christopher Johnson in London, Nick
Trevethan in Singapore and Robert Gibbons in New York; editing
by Bob Burgdorfer.)