U.S. oil jumps $2 on economic data, supply worries
NEW YORK (Reuters) - U.S. oil prices jumped $2 to near $77 a barrel on Friday as supply concerns and signs of U.S. economic growth helped counter worries about falling stock markets.
U.S. oil traded up $1.97 at $76.92 a barrel by 1806 GMT, while benchmark London Brent crude rose $1.20 to $76.38 a barrel, after ending $1.14 lower on Thursday.
U.S. gross domestic product rose at a 3.4 percent annual rate -- the fastest since 4.8 percent in the first quarter of 2006 -- after growing at a downwardly revised 0.6 percent pace in the first quarter, the Commerce Department said on Friday.
"This morning's GDP figure seems to have instilled renewed confidence in the market that was somewhat shaken yesterday," said Mike Fitzpatrick, vice president at MF Global.
Crude fell on Thursday as more signs of deterioration in the U.S. housing market and problems in financing corporate takeovers sent stock markets lower, stirring concerns about energy demand growth.
U.S. stocks slid again on Friday, sending the benchmark S&P 500 index down more than 1 percent as the concerns persisted.
Oil has surged over the past month to near record highs over $78 as supply concerns helped draw investor interest.
Government inventory data on Wednesday showed a third straight decline in U.S. crude stocks, and analysts said output curbs by the Organization of Petroleum Exporting Countries would ensure a continuing decline through the third quarter.
Meanwhile, analysts cut their non-OPEC oil supply growth estimates for this year by more than half due to faster-than-expected declines from producers such as Norway and Mexico, a Reuters poll showed on Friday. <ID:nL25877250>
Institutional investors have piled into oil markets as prices rallied, reaching record net longs on the New York Mercantile Exchange this month. Some analysts said the increased investor money was supporting prices.
"I think you have to look at record open interest and length to see that the current prices are being driven by speculation rather than physical issues," said IAF Advisors' Kyle Cooper.
Traders, meanwhile, continued to monitor the closure of most of ExxonMobil Corp.'s (XOM.N) 326,000 barrel-per-day Fawley refinery, which accounts for almost a fifth of Britain's refining capacity. Exxon said on Thursday it planned to restart operations over the next several days.
(Additional reporting by Felicia Loo in Singapore and Peg Mackey in London)
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