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Oil rises on unexpected US data

Aug 27 2010 15:31 Reuters

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London - Oil edged higher towards $74 a barrel on Friday after better-than-expected US data tempered concerns over the strength of economic recovery in the world's largest energy user.

US economic growth slowed more sharply than initially thought in the second quarter but the reading was slightly better than market expectations, prompting a modest rally on equity markets.

US crude for delivery in October Wc1 rose 22 cents to $73.58 a barrel by 12:51 GMT. Oil hit a trough of $70.76 on Wednesday, the lowest price since early June. Prices have slid about $10 from a peak near $83 on August 4.

October ICE Brent LCOc1 rose 55 cents to $75.57 on Friday. 

 
Later in a speech to fellow central bankers, US Federal Reserve Chairman Ben Bernanke is likely to discuss the uncertain prospects for the economy but is not expected to give many clues about whether the central bank will pump in more cash to keep the recovery going.

Weakness in the consumer sector has slowed energy demand growth in the United States, sending the nation's total petroleum inventories to their highest since weekly records began in 1990.

Bloated US inventories are depressing prices of benchmark West Texas Intermediate crude relative to North Sea Brent. The premium of front-month Brent futures over front-month WTI jumped over $2.00 on Friday for the first time since May.

Tropical Storm Earl in the eastern Atlantic Ocean continued to move westward on Thursday, with the US National Hurricane Centre expecting the system to become the season's third hurricane by Saturday.

Early computer models still show the storm moving west and northwest, away from key oil and gas producing areas in the Gulf of Mexico. Hurricane Danielle, which strengthened to Category 3, was also expected to stay in the Atlantic.

 
 
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