NEW YORK Brent oil rose a second day on Friday, recovering from an early decline as supportive U.S. economic data coupled with North Sea and Nigerian production problems yielded some relief from concerns about Spain and tepid global demand.
Brent lost half a percent for the week and U.S. crude futures slumped 4.2 percent as rising crude oil inventories in the United States weighed on prices and limited Friday's gain for the U.S. crude contract.
U.S. heating oil and RBOB gasoline futures rose for a second straight day, tracking Brent's strength and receiving lift from concerns that Hurricane Sandy will disrupt U.S. East Coast refinery operations. The storm is forecast to hit the Mid-Atlantic coast early next week.
Oil prices received support after the government said U.S. gross domestic product expanded at a 2.0 percent annual rate in the third quarter. Economists polled by Reuters had expected growth of 1.9 percent.
Brent December crude rose $1.06 to settle at $109.55 a barrel, in light volume trading from $107.40 to $109.65. For the week, Brent dipped 59 cents, a second straight weekly loss.
U.S. December crude edged up 23 cents to settle at $86.28 a barrel, having recovered after falling to $85 and, like Brent, also up a second consecutive session.
After Monday's expiration of the November contract at $88.73, down 1.5 percent as it went off the board, U.S. crude on Friday posted a weekly loss of 4.2 percent, also a second consecutive weekly decline.
Total crude futures trading volume was light. Brent's dealings were 18 percent below its 30-day average, while U.S. turnover lagged its 30-day average by 28 percent.
Healthy U.S. crude oil inventories that rose sharply last week and refinery capacity utilization languishing well below 90 percent helped limit U.S. crude gains, traders said. <EIA/S>
Speculators cut their net long U.S. crude oil futures and options positions to the lowest level in three months in the week to October 23, the U.S. Commodity Futures Trading Commission said in a report released on Friday after crude futures posted settlements.
Worries about Spain kept the euro in check and the dollar index .DXY seesawed. Equities on Wall Street were mixed, with the S&P 500 index slipping, as disappointing corporate earnings countered support from the U.S. GDP figures and a report showing U.S. consumer sentiment rose to its highest in five years this month. <USD/> <.
The conflict in Syria and associated violence in the region, along with the dispute over Iran's nuclear program, added support for crude ahead of the weekend, especially for Brent.
Traders and analysts also noted that Brent's premium to U.S. crude, increasing to $23.27 a barrel based on settlements, was being pushed back toward $24 a barrel after it found support just above $19 on Monday.
"The North Sea Buzzard (oilfield) delays seem to be helping keep Brent supported and traders are probably cautious about being too short over the weekend in case something happens in the Middle East," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
"Sandy is supporting the products and heating oil is often more closely tied to Brent. (Heating oil) is getting some support from Brent's move up," he added.
Hurricane Sandy headed for the U.S. East Coast on Friday after killing at least 41 people as it cut across the Caribbean.
U.S. front-month November heating oil rose more than 1 percent, gaining 3.57 cents to settle at $3.0978 a gallon.
November gasoline rose 2.27 cents to settle at $2.6991 a gallon, after jumping nearly 3 percent the previous session, snapping a string of 10 lower settlements.
The November refined products contracts expire on October 31.
U.S. Northeast oil companies prepare for Hurricane Sandy