* Dollar weakens, lending oil support
* Oil buoyed by China's optimism on economic rebound
* Feb U.S. jobs data likely to reinforce grim outlook
* Mixed signals from OPEC on supply cut at next meeting
(Previous SINGAPORE, updates prices, adds quotes)
By Alex Lawler
LONDON, March 6 (Reuters) - Oil rose above $44 a barrel on
Friday, after sinking 4 percent in the previous session, gaining
support from a weaker dollar and a meeting of OPEC later this
month.
The market was also supported by China's optimism that its
domestic economy was recovering and official promises of more
swift stimulus action when required. China is the world's
second-largest oil consumer.
U.S. crude <CLc1> was up 98 cents at $44.57 a barrel by 1205
GMT after rising as high as $44.76, while London Brent crude
<LCOc1> advanced 56 cents to $44.20 a barrel.
Brent has lost its rare premium to U.S. crude because of a
decline in U.S. inventories. High U.S. stocks, particularly at
the Cushing oil hub, had been keeping the American marker at a
discount to Brent.
Markets will be watching for the February U.S. non-farm
payrolls data due later in the session, which will probably show
unemployment surging to a 25-year high in the world's top oil
consumer.
"Today, traders will turn their attention to the non-farm
payroll report which in case of a negative surprise may pose an
obstacle to further gains," said Marius Paun, commodities
analyst at ODL Securities.
UNEMPLOYMENT
Friday's key non-farm payrolls report is expected to show
the economy shed 648,000 jobs in February, while the
unemployment rate is expected to rise to a 25-year high of 7.9
percent, according to a Reuters poll.
The U.S. dollar weakened before the Labor Department's
release of the payrolls report at 1330 GMT. Weakness in the U.S.
currency can boost investor demand for oil and other
commodities.
Asian stocks slid following losses on Wall Street due to a
warning from General Motors <GM.N> it could go bankrupt and
uncertainty about the fate of the banking sector. European
stocks made early losses. <>
Top Chinese officials said on Friday substantial fiscal and
monetary stimulus was breathing life back into the world's
third-biggest economy hit by crumbling exports, suggesting
Beijing saw no need to boost the existing investment plan of
nearly $600 billion. []
Oil has traded in a band from around $33 to $50 since
mid-December, pressured by slumping demand due to the economic
downturn. Expectations OPEC might cut production again when it
meets on March 15 have added support.
OPEC has agreed to cut production by 4.2 million barrels per
day since September, and a Reuters survey found that members
have met 81 percent of their output reductions as of last month.
Angola, which holds the presidency of the 12-member group,
will not advocate further production cuts when the group meets,
oil sources said, but Venezuela, Algeria and Libya have raised
the possibility of a further cut.
"We expect the cartel to put through a modest cut when it
gets together and judging by how well the market is holding up,
participants seem to be expecting the same," said MF Global.
(Additional reporting by Jennifer Tan; Editing by James
Jukwey)
