Oil rose more than $1 and broke above $55 a barrel on Wednesday, bouncing up from moribund early trade around $54 after data showed U.S. private sector job losses had slowed in April.

U.S. light crude for June delivery was up $1.60 cents to $55.43 a barrel by 1323 GMT (7:23 a.m. EDT), having settled 63 cents lower on Tuesday.

London Brent crude was up $1.19 to $55.29.

Crude and unemployment numbers aren't directly linked, but the energy market and the metals market are both up on the back of these (employment figures), said Rob Montefusco, a trader at Sucden Financial in London.

That was a jolt, and with a bit of a recovering euro it gives us a spurt.

U.S. private sector job losses slowed in April, coming in below economists' expectations as employers cut 491,000 from the salary rolls versus an expected 650,000 private-sector job cuts.

U.S. crude and gasoline inventories fell last week, the American Petroleum Institute said on Tuesday, down from analysts expectations by 1 million barrels of oil and nearly 3 million barrels of gasoline. A second set of inventory data, from the U.S. Energy Information Administration (EIA), comes out on Wednesday at 1430 GMT (10:30 a.m. EDT), and could bring more support to prices if it confirms what would be the first draw in crude stocks in nine weeks.

STRESS TEST

The market will also look for the results of U.S. government bank stress tests for any signs of an economic recovery that could indicate growth in oil demand.

Equity markets had earlier fallen after reports that Bank of America needs $34 billion in fresh capital, according to a source familiar with the results of one of those tests.

Most of the 19 U.S. banks being tested intend to hold news conferences on Friday to explain the results of the government's assessments, with about 10 of the 19 banks deemed to need more capital.

Oil has risen from the low $30s hit this winter, driven higher by stronger equity markets, but has failed to settle above $55 a barrel so far this year as the market sees oil fundamentals still weak, with U.S. crude inventories at 19 year highs.

Around 100 million barrels of crude oil and 25 million barrels of products are estimated to be floating at sea on giant tankers as supply outstrips demand.

(Additional reporting by Maryelle Demongeot in Singapore, editing by Keiron Henderson)

Jobs