Oil jumps on weak dollar, industry cuts in jobs, spending

NEW YORK (Reuters) - Crude oil futures climbed on Thursday, arresting a two-session losing streak, as industry spending cuts and a weaker dollar spurred buying.

The chief executive of Shell said Thursday supply might not be able to keep up with growing demand after oil companies slashed budgets following a near-halving of oil prices since June.

French energy major Total on Thursday became the latest to announce investment and job cuts because of weak oil prices.

"Shell's CEO had a more bullish take on supply and demand and the weaker dollar also helped support crude," said Phil Flynn, analyst at Price Futures Group in Chicago.

With the front-month March crude contract set to expire on Thursday, Brent futures led the complex higher and were up $2.44 at $57.10 a barrel at 11:49 a.m. EST, following a 3 percent loss in the previous session.

U.S. March crude futures were up $1.77 at $50.61, after falling more than 2 percent on Wednesday.

U.S. crude reached $51.41 on Thursday before paring gains after oil services firm Genscape reported a large build at the Cushing, Oklahoma, storage hub and delivery point for the U.S. crude contract.

Traders remain split over whether the market has found a floor after rising 25 percent from a post-2009 low near $45 a month ago. Many see the market currently oversupplied by up to 2 million barrels per day.

Volatility has jumped to its highest since the financial crisis, jolting traders who had been adjusting to a period of predictable declines following the near 60 percent crude crash between June and January.

Traders pointed to a weaker dollar as boosting buying on Thursday, as the drop made dollar-priced commodities such as oil cheaper.

Saudi Arabia's oil minister Ali al-Naimi discussed a "relative improvement" in the oil market with Algerian Justice Minister Tayeb Louh, Saudi state news agency SPA reported on Wednesday.

U.S. crude stocks rose to a record weekly high last week, while gasoline stocks increased and distillate inventories fell, data from the Energy Information Administration (EIA) showed on Wednesday.

The drop in distillate stocks helped U.S. March heating oil futures rally more than 7 cents on Thursday and RBOB gasoline futures were lifted along with crude.

On Thursday, Kuwait suspended crude and oil product exports as a sandstorm hit the Gulf OPEC member. The suspension will be lifted when weather conditions improve.

(Additional reporting by Himanshu Ojha and David Sheppard in London and Adam Rose in Beijing; Editing by Dale Hudson, Ruth Pitchford and Bernadette Baum)

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