* May Brent pushes to contract high above $118/bbl
* U.S. crude nears $108, highest since September 2008
* U.S. March nonfarm payrolls stronger than forecast
* Coming up: CFTC positions data at 3:30 p.m. EDT Friday
(Recasts, updates prices and market activity, adds detail)
By Robert Gibbons
NEW YORK, April 1 (Reuters) - Oil prices rose on Friday in
choppy trading, with U.S. crude reaching a 2-1/2-year high as
supportive U.S. jobs data reinforced economic growth
expectations.
Geopolitical supply risks also supported oil as Libya's
conflict and Middle East unrest persist and elections near for
OPEC-member Nigeria, brokers and analysts said.
Oil prices also benefited from momentum after ending the
first quarter posting double-digit quarterly gains.
Brent crude for May <LCOc1> rose 73 cents to $118.09 a
barrel by 1:49 p.m. (1749 GMT), reaching a contract peak of
$118.59. Brent's front-month 2-1/2-year high of $119.79 was
struck on Feb. 24.
Brent has recovered after falling below $108 in the
aftermath of Japan's March 11 earthquake and tsunami.
U.S. crude <CLc1> rose 69 cents to $107.41, having reached
$107.93, the highest intraday price since September 2008. U.S.
crude took out the previous 2011 peak ahead of the jobs data.
Total U.S. crude trading volume, at 380,000 lots, remained
well below the 30-day average, while Brent's 414,000 lots was
only 15 percent below its 30-day average.
"You have the jobs report, Libya has escalated, you've got
Nigeria elections soon and Syria and the Middle East unrest and
its the first day of the quarter so you have new money come
in," said Richard Ilczyszyn, senior market strategist at
Lind-Waldock in Chicago.
"There is a tug of war going on with the dollar after the
jobs report and it's Friday so there may be reluctance to go
into the weekend short."
U.S. employment recorded a second straight month of solid
gains in March and the jobless rate fell to a two-year low of
8.8 percent. Nonfarm payrolls rose 216,000, more than the
190,000 expected. []
The U.S. manufacturing sector grew at a marginally slower
pace in March although a measure of prices rose to their
highest level since July 2008, according to an industry report
that some viewed as adding support for oil prices.
[]
"The trivial drop back in the ISM manufacturing index to
61.2 in March, from 61.4, still leaves it at a level consistent
with GDP growth of more than 5 percent annualized," Paul
Ashworth, chief U.S. economist at Capital Economics in London
said in a note.
He cautioned actual growth, "will be lower," because of the
less robust services and weak housing sectors.
DOLLAR AND MONETARY POLICY
Oil seesawed after the jobs report as the dollar
strengthened and revived, if briefly, the view that the U.S
Federal Reserve might curb its current ultra-loose monetary
policy that tends to benefit riskier assets like commodities.
The U.S. dollar slipped against the euro, though the dollar
index retained some gains. More losses versus the euro were
seen likely in the near-term on expectations the European
Central Bank will tighten monetary policy before the U.S.
Federal Reserve.
New York Federal Reserve President William Dudley said it
would be a surprise if the Fed did not complete its $600
billion in bond purchases, dampening belief that the positive
jobs data would alter policy near term. []
LIBYA, MIDDLE EAST TURMOIL
Oil prices remain supported by conflict in Libya and Middle
East turmoil.
Libyan leader Muammar Gaddafi's forces stormed the western
rebel outpost of Misrata, while insurgents marshaled defenses
in their eastern heartland. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
More on Middle East unrest: [] []
Libya Graphics; http://link.reuters.com/neg68r
Interactive graphic; http://link.reuters.com/puk87r
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Further supply disruption came from Gabon in central
Africa, which produces between 220,000 and 240,000 barrels per
day of crude. Striking workers shut half the output on Friday
and were to halt the rest within 48 hours. []
Bahrain has stepped up arrests of cyber activists and
Shi'ites and protests broke out in Syria after Friday prayers,
a favored time for demonstrations in the Middle East.
[] []
(Additional reporting by David Sheppard in New York, Nia
Williams in London and Alejandro Barbajosa in Singapore;editing
by Sofina Mirza-Reid)
