UPDATE 7-Oil flat as weaker dollar offsets coronavirus demand worries

* U.S. dollar falls to two-week low on rise in jobless
claims
* S&P 500 scales new record high on tech boost
* Russia says COVID could hurt oil demand until 2023-2024
* U.S. gasoline stocks jump 4 mln barrels last week
* Tentative talks around lifting of Iranian sanctions

(Adds closing prices, fresh comment from analyst)
By Scott DiSavino
NEW YORK, April 8 (Reuters) - Oil prices were little changed
on Thursday as a falling dollar and rising stock markets offset
earlier declines caused by a big increase in U.S. gasoline
stockpiles and subdued demand compared with pre-pandemic levels.
Brent LCOc1 futures rose 4 cents, or 0.1%, to settle at
$63.20 a barrel, while U.S. West Texas Intermediate (WTI) crude
CLc1 ended 17 cents, or 0.3%, lower at $59.60.
"Crude prices are struggling for direction as short-term
COVID pressures are countered by a much weaker U.S. dollar,"
said Edward Moya, senior market analyst at OANDA in New York.
The U.S. dollar .DXY fell to a two-week low against a
basket of currencies, tracking Treasury yields lower, after data
showed a surprise rise in U.S. weekly jobless claims.

A weaker dollar makes oil cheaper for holders of other
currencies, which usually helps boost crude prices.
The S&P 500 .SPX , meanwhile, hit a record high and the
Nasdaq .IXIC was at a seven-week peak, helped by gains in
tech-related stocks, a day after the Federal Reserve reiterated
its pledge to remain ultra-dovish until the economic recovery is
more secure. U.S. gasoline inventories rose sharply by 4 million barrels
to a little more than 230 million barrels as refiners ramped up
output before the summer driving season, the U.S. Department of
Energy said on Wednesday. EIA/S
"A huge build in road fuel stocks is not what the market was
expecting and concerns over the speed of the oil demand recovery
resurfaced, leaving traders wondering how stable road fuel usage
actually is," said Rystad Energy analyst Bjornar Tonhaugen.
Russia said the fallout from the COVID-19 pandemic on the
global consumption of oil may last until 2023-2024, according to
a draft government document seen by Reuters. While oil demand remains weakened by the impact of the
coronavirus, crude production looks set to rise.
Last week, the Organization of the Producing Countries
(OPEC) and its allies, including Russia, a group known as OPEC+,
agreed to bring back about 2 million barrels per day (bpd) of
production over the next three months. Iran and the United States held talks with other powers on
reviving a nuclear deal that almost stopped Iranian oil from
coming to market, reviving tentative hopes Tehran might see some
sanctions lifted and add to global supplies. Data intelligence firm Kpler said the U.S.-Iran negotiations
provide potential for 2 million bpd in additional oil supply if
a deal is struck.
Russian oil output increased from average March levels in
the first few days of April, traders said. In the United States, energy research firm East Daley lifted
its rig and production outlook for the Permian Basin in Texas
and New Mexico following a 22% rally in WTI prices during the
first quarter. The firm said that price rise set the stage for
years of additional oil and natural gas output from the shale
formation.

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CHART: Brent oil may test support at $61.22 U.S. oil may retest support at $58.80 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>