* May Brent pushes to contract high above $119/bbl
* US crude close, intraday peaks, highest since Sept. 2008
* U.S. March nonfarm payrolls stronger than forecast
(Updates intraday price peaks, trading volumes paragraphs
5-8)
By Robert Gibbons
NEW YORK, April 1 (Reuters) - Oil prices jumped on Friday,
as supportive U.S. jobs data reinforced economic growth
expectations and Libya's conflict and Middle East unrest kept
supply threats in focus, pushing both Brent and U.S. crude to
their highest settlements since 2008.
U.S. nonfarm payrolls registered solid growth for a second
month in March and the jobless rate hit a two-year low of 8.8
percent, helping fuel optimism about oil demand.
Geopolitical supply risks also had oil traders wary of
being too short at the weekend, as Libya's undecided 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 $1.34 to settle at $118.70
a barrel, the highest close since August 2008 and up $3.11 for
the week. It hit a May contract peak of $119.14 in
post-settlement trading.
Brent's front-month 2-1/2-year high of $119.79 was struck
on Feb. 24. Brent has bounced back after falling below $108 in
the aftermath of Japan's March 11 earthquake and tsunami.
U.S. crude <CLc1> rose $1.22 to settle at $107.94, pushing
to $108.47 in post-settlement trading. Both the settlement and
the intraday peak were the highest since September 2008. U.S.
crude took out the previous 2011 peak ahead of the jobs data.
The weekly total U.S. crude trading volume was the lowest
of the year, dropping to 2.45 million lots traded, down from
2.53 million last week and lowest since the week to Dec. 31,
according to Reuters data.
Friday's volume of 509,669 lots was 32 percent below the
30-day average, while Brent's daily volume of 454,581 lots, was
only 7.5 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."
Money managers raised their net-long positions in crude oil
futures and options on the New York Mercantile Exchange in the
week to Tuesday, the Commodity Futures Trading Commission said
in a report on Friday. []
The U.S. jobs report showed nonfarm payrolls rose 216,000,
more than the 190,000 expected and followed Thursday's report
that weekly initial jobless benefit claims fell last week.
[]
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.
The robust jobs data and Fed comments lifted U.S. equities
and the S&P 500 index, closely watched by many oil investors,
broke above 1,332, doubling the 12-year low hit in March 2009.
[]
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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 Marguerita Choy)
