UPDATE 10-Oil surges after OPEC+ holds cuts, strong U.S. jobs growth

Reuters

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    * For the week, Brent gains 5.2% gain, WTI up 7.4%
    * U.S. job growth exceeds forecasts as recovery back on
track
    * Investors surprised Saudi keeps voluntary cuts
    * Banks revise up price forecasts after OPEC holds output
steady

 (Updates first bullet point to settlement)
    By Scott DiSavino and Jessica Resnick-Ault
    NEW YORK, March 5 (Reuters) - Oil prices jumped about 3% on
Friday, hitting their highest levels in more than a year,
following a stronger-than-expected U.S. jobs report and a
decision by OPEC and its allies not to increase supply in April.
    Brent  LCOc1  futures rose $2.62, or 3.9%, to settle at 
$69.36 a barrel. The session high for the global benchmark was
its highest since January 2020.
    U.S. West Texas Intermediate (WTI) crude  CLc1  rose $2.26,
For the week, Brent gains 5.2% gain, WTI up 7.4%or 3.5% to
settle at $66.09 a barrel.
    For the week, Brent was up 5.2%, rising for a seventh week
in a row for the first time since December, while WTI was up
about 7.4% after gaining almost 4% last week.
    Both contracts surged more than 4% on Thursday after the
Organization of the Petroleum Exporting Countries and allies,
together known as OPEC+, extended oil output curbs into April,
granting small exemptions to Russia and Kazakhstan.  urn:newsml:reuters.com:*:nL2N2L20UQ
    "OPEC+ settled for a cautious approach ... opting to
increase production by just 150,000 barrels per day (bpd) in
April while market participants looked for an increase of 1.5
million bpd," said UBS oil analyst Giovanni Staunovo.
    Investors were surprised that Saudi Arabia had decided to
maintain its voluntary cut of 1 million bpd through April even
after the oil price rally of the past two months on the back of
COVID-19 vaccination programs around the globe.
    Some forecasters revised their price expectations upward
following the OPEC+ decision.
    Goldman Sachs raised its Brent crude price forecast by $5 to
$75 a barrel in the second quarter and $80 a barrel in the third
quarter of this year. UBS raised its Brent forecast to $75 a 
barrel and WTI to $72 in the second half of 2021.
 urn:newsml:reuters.com:*:nFWN2L20YP urn:newsml:reuters.com:*:nFWN2L20YH
    In addition, the market got a boost after a report showed
the U.S. economy created more jobs than expected in
February. urn:newsml:reuters.com:*:nL2N2L23EI
    The nonfarm payroll report "shows that Americans are closer
to pre-pandemic behavior that will drive strong demand for
crude," said Edward Moya, senior market analyst at OANDA in New
York.
    Traders also noted the rising dollar .DXY , which hit its
highest since November, was limiting the gain in crude prices. 
A stronger dollar makes oil more expensive for holders of other
currencies.
    However, analysts and traders have said that slow physical
crude sales and recovery for demand not predicted until around
the third quarter suggest that the price rally is unwarranted.
 urn:newsml:reuters.com:*:nL5N2KZ6AA
    "The market suggests a tightness that does not exist.
Therefore, we continue to believe that the price risk is mainly
downward and that the current price is overshooting," said Hans
van Cleef, senior energy economist at ABN Amro.
    India, the world's third-biggest oil importer and consumer,
said that the OPEC+ decision to extend cuts as prices move
higher could threaten the consumption led-recovery in some
countries.  urn:newsml:reuters.com:*:nL2N2L30CB
    The recovery in oil prices to pre-pandemic levels has also
spurred U.S. oil drillers to return to the well pad. The oil rig
count rose by one this week after rising for six straight
months, according to energy services firm Baker Hughes Co.
 RIG/U   RIG/U 

 (Additional reporting by Noah Browning in London, Sonali Paul
in Melbourne and Koustav Samanta in Singapore;
Editing by Marguerita Choy, Will Dunham and Emelia
Sithole-Matarise)
 ((Jessica.Resnick-Ault@thomsonreuters.com; +1 332 219 1145;))

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