* U.S. Q1 GDP below forecast weighs on crude, dollar
* Weak economic data may make QE3 more likely-traders
* U.S. Feb oil demand revised higher - EIA
* Coming up: API oil data at 4:30 p.m. EDT Tuesday
(Adds crude spread detail, CFTC data paragraphs 9, 12)
By Robert Gibbons
NEW YORK, April 27 Oil prices closed little
changed o n F riday after light, tug-of-war trading, as hopes for
additional easing by the Federal Reserve to boost a sputtering
U.S. recovery countered concerns about economic growth.
Brent edged lower and U.S. crude rallied late, reducing
Brent's premium to its U.S. counterpart, while both contracts
posted their second consecutive weekly gains.
Prices felt pressure early, after ratings agency S&P
downgraded Spain's credit rating, adding to economic concerns
about the euro zone. Oil pared losses ahead of U.S. GDP figures
that showed growth cooled in the first quarter.
Some investors believe slowing U.S. growth may prompt the
Federal Reserve to launch a third round of government bond
buying, or quantitative easing, known in markets as QE3.
"Bad news for the economy is being interpreted as good news
for commodities because it may put QE3 back on the table," said
Dominick Chirichella, senior partner at Energy Management
Institute in New York. "Whether or not that trade has any
longevity is not clear."
The dollar's weakness and strong equities on Wall Street
added support for crude, along with a rise in U.S. consumer
Brent June crude fell 9 cents to settle at $119.83,
having traded in a range of $119.06 to $119.95. Brent had a
nearly 1 percent weekly gain but remained on pace to post a more
than 2 percent monthly loss.
U.S. June crude rose 38 cents to settle at $104.93,
having reached $105 but stalling ahead of the 50-day moving
average of $105.10. The weekly gain was 1.8 percent, on track
for a similar monthly rise.
Brent's premium to its U.S. counterpart CL-LCO1=R narrowed
to end at $14.90 based on settlements, after reaching $15.64
intraday. The spread has been in a roughly $13-$16 range since
the April 16 news of a mid-May reversal of the Seaway pipeline
that should begin easing a U.S. Midwest bottleneck and shuttle
crude to the refinery-rich Gulf Coast.
Trading volumes were very light, well under 30-day averages
for Brent and U.S. crude.
The Chicago Board Options Exchange's Oil Volatility Index
fell to a record low below 25 intraday. The index is a
measure of implied volatility. [ID:nL2E8FR4IA}
Money managers raised their net long U.S. crude futures and
options positions in the week to April 24, the Commodities
Futures Trading Commission said in a weekly report.
U.S. RBOB gasoline futures edged up in choppy
trading, while heating oil dipped, as front-month May
contracts approach expiration on Monday.
U.S. GROWTH SLOWS
U.S. economic growth cooled in the first quarter to a 2.2
percent annual rate, the government said in its advanced
estimate, moderating from the fourth quarter's 3.0 percent.
The report followed a reiteration by the Federal Reserve on
Wednesday of its intent to keep interest rates low. Fed chief
Ben Bernanke said the central bank stood ready to move to
support the economy if it faltered.
U.S. consumer sentiment inched up in April, putting the
index at its highest since February 2011.
The dollar slumped to multi-week lows against the euro and
yen on the possibility of more stimulus. A weaker U.S. currency
can be supportive to dollar-denominated oil by making it less
expensive to consumers using other currencies.
IRAN AND SUPPLY DISRUPTIONS
The U.S. Energy Information Administration (EIA) said on
Friday that global oil supply exceeded demand by 500,000 barrels
per day over the last two months as Saudi Arabia lifted output,
more than countering rising non-OPEC outages.
The report is required every 60 days by an Iran sanctions
law enacted in December and was expected to allow the Obama
administration to press ahead with sanctions.
This month's revived talks involving Iran and major powers
about Tehran's disputed nuclear program eased the geopolitical
fear premium in oil prices, but traders and analysts remain
skeptical the talks will succeed and a European Union embargo on
Iranian crude set for July looms.
Disrupted production in the North Sea, Yemen and Sudan and
turmoil in OPEC member Nigeria have supported oil prices even as
signs of slowing global economic growth, lackluster U.S. demand
and rising stockpiles pulled crude prices off 2012 peaks reached
in the first quarter.
(Additional reporting by Gene Ramos in New York, Claire
Milhench in London and Luke Pachymuthu in Singapore; Editing by
Alden Bentley, David Gregorio and Dale Hudson)