UPDATE 8-Oil gains $1 as U.S. equities rally on jobs data
* U.S. adds 175,000 jobs in May - Labor Department
* Job gains revive speculation over stimulus
* New outage at North Sea Buzzard oilfield (Updates prices to settlement, adds CFTC data)
NEW YORK, June 7 (Reuters) - Brent crude oil rose $1 a barrel on Friday as data pointing to modest gains in U.S. hiring gave U.S. stock markets a boost, taking crude along for the ride.
The United States added 175,000 jobs last month, Labor Department data showed, just above the median forecast in a Reuters poll.
Investors read the figure as high enough to indicate an ongoing recovery, but low enough to soothe concerns that the U.S. Federal Reserve might end its stimulus efforts sooner than expected. All three major U.S. stock indexes traded up around 1 percent by mid-afternoon.
The unemployment rate ticked up a tenth of a percentage point to 7.6 percent, with the increase seen as encouraging since it was driven by more workers entering the labor force.
Brent crude settled up 95 cents at $104.56 a barrel. During the session, the contract traded as high as $105 and below $103. Brent clocked a 4 percent weekly gain, its strongest since July 2012.
U.S. oil gained $1.27 to settle at $96.03 a barrel, heading for the strongest weekly gain since April 26 at 4.5 percent.
Oil analyst Jim Ritterbusch of Ritterbusch and Associates observed in a research note that the 4.5 percent gain "simply provided an offset to a 4 percent price decline across the prior two weeks."
"This type of 'chop' is likely to continue through the rest of this month amidst conflicting macroeconomic signals that have been pushing bearish oil balances to the backburner," Ritterbusch wrote.
Brent and U.S. crude dipped just after the release of the jobs data at 8:30 a.m. EDT (1230 GMT) but began to rise when U.S. stock markets opened an hour later.
"Oil is taking a cue from the equity market, which obviously liked the employment data," said John Kilduff, a partner at Again Capital LLC in New York.
"The upside surprise versus expectation is signaling further economic improvement and energy demand."
The Fed's policy-setting committee meets on June 18-19. With data ranging from manufacturing to consumer spending showing the economy hit a soft patch early in the second quarter, it is unlikely the U.S. central bank will announce at that meeting a lessening of the $85 billion in bonds it is buying each month.
Tropical Storm Andrea was moving close to Fayetteville, North Carolina on Friday afternoon, which traders said supported U.S. crude.
"No one wants to be short on the weekend with a potential storm coming," said Bill Baruch, senior market strategist at iitrader.com in Chicago, Illinois.
Brent had been supported on Thursday by news that the Buzzard oilfield in the UK North Sea had suffered a production outage, the second in less than a week. The field's normal production is about 200,000 barrels per day.
News of a fall in U.S. oil inventories also supported prices, particularly the U.S. benchmark. Crude stocks at the Cushing, Oklahoma oil hub declined more than 1 million barrels between May 31 and June 4, energy industry intelligence service Genscape reported Thursday.
Money managers and other large speculators cut their net long U.S. crude futures and options positions in the week to June 4, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
The speculator group cut its combined futures and options position in New York and London by 7,455 contracts to 243,076 during the period. (Additional reporting by Ron Bousso in London, Manash Goswami in Singapore; Editing by Dale Hudson, David Gregorio and Chizu Nomiyama)