(Updates to clarify $65 is for Q4, adds forecast for end 2010)

KUALA LUMPUR, June 8 (Reuters) - JP Morgan (JPM.N) has raised its forecast for fourth-quarter 2009 U.S. oil prices to $65 a barrel versus above $55 made in May, on expectations of economic recovery and seasonal factors.

For the end of next year, JP Morgan has also revised its forecast to $70 versus $60 predicted in its last monthly energy report.

"The dollar has been the prime factor driving the market," said Lawrence Eagles, Global Head of Commodities for JP Morgan Chase at the Asian Oil and Gas Conference.

The dollar extended gains against a basket of currencies after posting its largest one-day rise in over five months on Friday on data showing the pace of U.S. job losses slowed in May, prompting expectations of a rise in interest rates. [USD/] [O/R]

A stronger dollar makes commodities such as oil, which is denominated in the currency, look more expensive to holders of other currencies.

U.S. crude CLc1 has doubled since hitting the low $30s in mid-December to $67.53 a barrel on Monday, but still off the record-highs above $147 a barrel reached in July last year.

Eagles said the latest forecasts will take into account significant risks on the upside as well as downside, factoring in the still abundant inventories and uncertain economic recovery.

"If economic forecasts are right, and we are coming out of the recession, the path for oil is going to be somewhat higher," he said.

"Even without a rapid V-shaped recovery in the second half of the year, we are likely to see demand at 1.5-3.0 million barrels (per day), higher than at this current point of the cycle. The risk is on the upside," he added. (Reporting by Jennifer Tan, Editing by Ramthan Hussain)