UPDATE 8-Oil jumps after Fed says it will act to sustain U.S. growth

* Fed Chair Powell repeats vow to act 'as appropriate
* U.S. job growth slows for seventh month, more than
expected
* Brent sets fourth weekly gain, WTI up for second straight
week
* U.S. rig count falls to almost two-year low

(Updates prices to settlement)
By Collin Eaton
HOUSTON, Sept 6 (Reuters) - Oil prices rose above $61 a
barrel on Friday after the head of the U.S. Federal Reserve said
the central bank will act "as appropriate" to sustain an
economic expansion in the world's biggest economy that has been
pressured by uncertainty over global trade.
Global benchmark Brent crude settled at $61.54 a barrel, up
59 cents, or 1%, while U.S. West Texas Intermediate (WTI) crude
ended 22 cents, or 0.4%, higher at $56.52.
Both benchmarks had declined earlier on concerns over
slipping U.S. job growth and continued U.S.-China trade
tensions, despite recent diplomatic progress.
The Federal Reserve has an obligation "to use our tools to
support the economy, and that's what we'll continue to do," Fed
Chair Jerome Powell said at the University of Zurich, sticking
to a phrase that financial markets have read as signaling
further interest-rate reductions ahead. The Fed cut rates by a
quarter of a percentage point in July. Crude prices "are working back up right now," said Bill
Baruch, president at Blue Line Futures LLC in Chicago. Comments
by Powell that indicate further interest rate reductions are one
factor that would help keep "a bid in the market ahead of the
weekend."
Oil prices had fallen earlier in the session as U.S.
government data showed the nation's job growth slowed in August
for the seventh month in a row, with nonfarm payrolls expanding
by 130,000, about 28,000 less than economists polled by Reuters
had forecast. Global oil demand could grow by just 900,000 barrels per day
(bpd) in 2019 and 2020, UBS oil analyst Giovanni Staunovo said
in a note analyzing oil market trends.
Other forecasts of oil demand growth have been reduced to
around 1 million bpd, down from earlier predictions of about 1.3
million bpd, analysts said.
"We're leaving the U.S. driving season," said Robert Yawger,
director of energy futures at Mizuho in New York. "It's a very
vulnerable position. The biggest worry is concerns about demand
growth and that's a function of the (U.S.-China) trade war."
The prolonged trade dispute between the United States and
China, the world's second-largest oil consumer, has had a
dampening effect on oil prices, though they have risen over the
year thanks partly to production cuts led by the Organization of
the Petroleum Exporting Countries and Russia to drain
inventories.
Beijing and Washington on Thursday agreed to hold high-level
talks in October. The news cheered investors hoping for an end
to a trade war that has brought tit-for-tat tariffs between the
world's two biggest economies, chipping away at economic growth.
"If trade tensions escalate further, oil demand growth may
soften even more, requiring much lower prices," Staunovo said,
forecasting that Brent will trade around $55 a barrel next year.
Brent posted its fourth consecutive weekly gain, rising
1.8%, while WTI rose 2.6% this week, boosted mainly by
Wednesday's upbeat economic data from China, the world largest
oil importer. WTI had an additional boost this week after the Energy
Information Administration (EIA) said on Thursday that U.S.
crude inventories last week fell sharply - nearly double
expectations - and for a third consecutive week. EIA/S
Oil prices soared more than 2% after the EIA report, though
they gradually fell back on investor doubts over the chances
that the trade talks will yield results.
U.S. crude production remains close to weekly record highs,
despite a record-tying nine months of cuts in the number of rigs
drilling for oil. RIG/U
U.S. oil companies cut the number of rigs drilling for crude
by four this week, bringing the total count to 738, the lowest
in almost two years, according to General Electric Co's GE.N
Baker Hughes energy services firm. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: U.S. petroleum inventories https://tmsnrt.rs/2XlX17b
TECHNICAL CHART: U.S. oil may test support at $55.74
L3N25X0O2
TECHNICAL CHART: Brent oil may hover below $61.54 L3N25X0B
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>