* Q1 operating profit beats forecasts
* Statoil shares jump more than 3 pct
* Maintains dividend and outlook
* CEO sees rebalancing of oil market (Adds analysts, CEO comments, share price reaction, BP, Totalresults)
By Stine Jacobsen and Ole Petter Skonnord
OSLO, April 27 (Reuters) - Norway's Statoil beatfirst-quarter earnings expectations on Wednesday and said theglobal oil market was approaching a balance between supply anddemand, offering a glimpse of optimism on the crisis-strickenindustry.
Cost-cutting helped the company beat analysts' forecasts, asits plan to slash $2.5 billion in costs on an annual basis fromthis year, and axe up to 19 percent of its workforce compared toat the height of the crude price boom, started to take effect.
Oil companies have slashed investments and jobs andcancelled some projects to cope with a 60 percent drop in theprice of crude since mid-2014.
Statoil CEO Eldar Saetre, however, said the global marketwas rebalancing and he had become more optimistic over the pastmonth.
"Whether it will be $80 (per barrel of Brent crude) in 2018,or sooner or later? That is uncertain. But we are confident onthe direction towards a rise in prices," he said at thecompany's earnings presentation.
His comments echoed those of BP CEO Bob Dudley whosaid on Tuesday he expected crude prices to recover towards theend of the year. Oil hit its highest level this year onWednesday, touching $46.8 a barrel, after rallying in the pastfew months.
Shares in Statoil, 67 percent owned by the Norwegian state, were up 3.7 percent by 0829 GMT, outperforming a 1 percent risein the Oslo benchmark index. It was among thebest-performing stocks in the Stoxx Europe 600 oil and gas index.
Although Statoil's first-quarter underlying operatingearnings plunged 70 percent from a year ago to $857 million dueto lower oil and gas prices, they were above expectations for$833 million in a Reuters poll of analysts.
Its core Norwegian business recorded a higher-than-expectedprofit in the first quarter, while its international unit posteda smaller loss than analysts had predicted, due to Statoil'scost-cutting scheme.
"We think the key takeaway of Statoil's results is successfrom their upstream cost reduction programmes which are drivingbetter bottom-line results," brokerage firm Bernstein said in anote to clients. Bernstein has an Outperform rating on thestock.
"Both Upstream Norway and Upstream International did betterthan we estimated due to lower costs. Statoil is thereforefollowing the trend of the European majors group i.e. opexreduction momentum, higher production, continued capex downside,and ultimately falling oil price break-evens."
Statoil said it increased its underlying production by 2percent in the first quarter from a year earlier, afteradjusting for divestments.
The Norwegian company has less exposure to refining thansome oil majors, so has not benefited as much from risingrefining margins as the oil price tumbled.
It said it would propose a first-quarter dividend of 22.01U.S. cents in line with its own guidance to keep the dividend atthis level for the first three quarters.
Like French peer Total, Statoil has proposed thatshareholders could choose shares over cash as a dividendpayment, a so-called scrip dividend. Total also maintained itsdividend on Wednesday as it posted forecast-beating net profits.
Statoil also kept its capital spending target of $13 billionand a total exploration activity level of $2 billion this year.However, analysts from Pareto, Carnegie and Exane BNP Paribassaid they expect capex to be lower than $13 billion this year. (Editing by Gwladys Fouche and Susan Fenton)
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