* Brent rises above $104, climbs for a second day
* Oil set for second month of decline
* OPEC output to increase in September - Reuters survey
* U.S. jobless benefits claims fell
By Jane Lee
SINGAPORE, Sept 30 (Reuters) - Brent crude rose above $104 a barrel on Friday on positive economic news, but prices this quarter remain on track for their biggest drop in 15 months on concerns that a slowing global economy will undercut fuel demand.
U.S. jobless benefits claims declined and German lawmakers approved a euro zone bailout fund with greater powers, easing some of the worries about the developed economies. The Dow Jones industrial average rose 143.08 points, or 1.3 percent, to 11,153.98 on Thursday and Asian stocks steadied on Friday.
ICE Brent
U.S. crude
"Crude oil has been holding up quite well compared with the other asset classes such as equities," said Ker Chung Yang, a commodities analyst at Phillip Futures in Singapore, who forecasts U.S. crude will be between $80 and $90 by the end of this year. Prices ended at $91.38 a barrel in 2010.
"Sentiment is negative on the macro-economic front but demand is still there, especially coming from the emerging markets, from China and India."
U.S. weekly jobless benefits claims fell to a five-month low while revised data showed second-quarter GDP grew slightly more than expected.
Germany's parliament overwhelmingly approved a plan agreed in July to expand the euro zone's bailout fund.
Brent is expected to fall back to the previous trading session's low of $102.35 as indicated by its wave pattern and a Fibonacci retracement analysis, according to Reuters market analyst Wang Tao.
PRICE FORECASTS
Morgan Stanley this week cut its 2012 average Brent price target, citing the prospect of returning supply amidst a weaker demand outlook. The bank lowered its outlook for the average Brent price to $100 a barrel next year from $130.
Non-OPEC supply was seen growing, largely because of Libyan restarts, Morgan Stanley said.
OPEC oil output is expected to rise in September to its highest level in almost three years due to a jump in exports from Iraq and the restart of supplies from Libya, a Reuters survey found on Thursday.
Supply from all 12 members of the Organization of the Petroleum Exporting Countries is forecast to average 30.25 million barrels a day this month, up from 30.15 million in August, the survey of sources at oil companies, OPEC officials and analysts found.
Libya's output, which fell to almost nothing due to the civil war, has begun to recover, the survey found. The country exported one small crude cargo on Sept. 25 and, sources say, is sending some oil to refineries. (Editing by Miral Fahmy)