Oil turns higher on U.S. jobs data, Fed comments

By Robert Gibbons

NEW YORK (Reuters) - Crude oil futures rallied on Tuesday, erasing losses after data showed U.S. job openings surged to a 14-year high in February and a Federal Reserve official argued against raising interest rates until late 2016.

Openings increased 168,000 to a seasonally adjusted 5.1 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS).

"That JOLTS report was certainly quite strong and strong employment equals strong gasoline demand," said John Kilduff, partner at Again Capital LLC in New York.

Minneapolis Fed President Narayana Kocherlakota made a case for waiting until the second half of 2016 to raise interest rates, and to then raise them gradually to just 2 percent by the end of 2017.

U.S. May crude was up $1.11 at $53.25 a barrel at 12:10 p.m. EDT (1710 BST), having traded from $51.17 to $53.46.

Brent May crude was up 48 cents at $58.60, having swung from $57.02 to $59.09.

Also cited as supportive was news that an oil spill into the Mississippi River on Monday forced authorities to close part of the waterway in Louisiana.

Eight refineries along the Mississippi in the region account for about 12 percent of U.S. refining capacity, according to the Energy Information Administration (EIA).

Crude futures fell earlier on signs of growing oversupply as Iranian officials visited China to seek more oil sales following the framework nuclear deal that could lead to the lifting of sanctions on Tehran.

Prices were also pressured by a Goldman Sachs report saying prices needed to remain low for months to slow U.S. oil output growth.

The American Petroleum Institute's (API) weekly report on U.S. oil inventories is due Tuesday at 4:30 p.m. EDT (2130 BST), with the EIA's report following on Wednesday at 10:30 a.m. EDT.

On Monday, industry intelligence provider Genscape said its data showed stocks at the Cushing, Oklahoma, oil hub rose by the relatively small amount of 169,000 barrels last week.

U.S. commercial stocks were seen extending their record build for a 13th consecutive week, a Reuters survey on Monday showed. [EIA/S]

(Additional reporting by Christopher Johnson in London and Henning Gloystein and Florence Tan in Singapore; Editing by Marguerita Choy)