RPT-UPDATE 7-Oil turns higher on ECB bank move, US data

News

* ECB banking move cheered but rate freeze disappoints

* US jobless claims rise less than expected, supportive

* Coming Up: US Sept nonfarm payrolls, 8:30 a.m. EDT Friday (Recasts, updates market activity and prices, changes dateline previously LONDON)

NEW YORK, Oct 6 (Reuters) - Oil prices rose on Thursday as Europe moved closer to pumping aid to the region's troubled banks and U.S. data showed jobless benefit claims rose less than expected last week.

Trading was choppy, with prices falling earlier after the European Central Bank left interest rates unchanged and the bank's chief warned of more regional economic risks.

European Commission President Jose Manuel Barroso said the EU's top executive body proposed a coordinated recapitalization of banks amid the region's sovereign debt crisis, which has dragged on commodities and stock markets over recent months. [ID:nL5E7L610F]

New claims for U.S. unemployment benefits rose less than expected last week, hinting at an improved labor market a day before the closely watched September non-farm payrolls report. [ID:nOAT004875]

"The markets are looking to embrace even the slightest improvement in the economy," said John Kilduff, a partner at hedge fund Again Capital in New York.

By 11:10 a.m. EDT (1510 GMT), Brent crude futures for November delivery rose 50 cents to $103.23 a barrel, climbing back from an intraday low of $101.53.

U.S. crude gained 83 cents at $80.5 a barrel.