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NEW YORK Crude oil prices rose on Friday, with Brent gaining nearly 15 percent in the third quarter, while expiring front-month U.S. gasoline futures rocketed late to rally 19 cents a gallon.
Brent and U.S. crude price trajectories were choppy in end-of-quarter trading as uncertainty about Spain's economy ahead of a ratings agency review weighed on the euro and stock markets after oil and equities rallied in the previous session on Spain's budget reforms.
Brent rebounded to a 14.9 percent gain for the third quarter, following a steep 20.4 percent second-quarter drop. U.S. crude rose 8.5 percent in the quarter after slumping 17.5 percent in the second quarter.
Maintenance-related curbs to North Sea output, Middle East turmoil and Iran's dispute with the West over Tehran's nuclear program helped lift oil prices in the quarter. Adding support were measures taken by the U.S., Japanese and European central banks to address sputtering global economic growth.
Friday's seesaw trading followed the previous session's strong gains after Spain announced a 2013 crisis budget based mostly on spending cuts and Israeli Prime Minister Benjamin Netanyahu drew a "red line" for Iran's nuclear program in a speech at the U.N.
"The bounce yesterday was a bit overdone," said Mike Wittner, the global head of oil research at Societe Generale in New York.
On Friday, Brent November crude rose 38 cents to settle at $112.39 a barrel, swinging from $111.52 to $113.40. The big quarterly gain came despite Brent posting a 1.9 percent loss for September.
U.S. November crude pushed up 34 cents to settle at $92.19 a barrel, in choppy trade ranging from $91.40 to $92.71. The quarterly gain by U.S. crude survived a 4.4 percent slump in September.
Money managers cut their net long U.S. crude futures and options positions in the week to September 25, the U.S. Commodity Futures Trading Commission said on Friday.
Moody's rating agency is due to review Spain's sovereign rating by the end of the month, and caution ahead of Friday's bank stress test results weighed on the euro and U.S. stocks and pulled crude back from early gains. .N <USD/>
Brent initially was lifted by trading sources saying that a sixth North Sea Forties cargo had been delayed from October loading dates as maintenance took longer than expected.
U.S. GASOLINE RALLY
U.S. front-month October RBOB gasoline surged as much as 28 cents heading into the session close in very thin trade. It settled 19.77 cents, or 6.29 percent, higher to go off the board at $3.3420 a gallon.
The rise, which extended a rally that tacked on nearly 40 cents onto the contract this week, was likely due to one market participant being caught short ahead of the expiry and having to buy from an illiquid market ahead of the close.
"The November contract didn't make it up more than 2.5 cents, so it looks like they had somebody got caught (short) and they squeezed them really, really hard," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
He noted that volume was very thin in the expiring October contract and that RBOB contracts trading in later months where there was more liquidity did not match the gains seen in the front-month contract.
November RBOB rose only 2.29 cents to settle at $2.9201 a gallon. The premium of front-month October gasoline to November futures ended at 42.19 cents, based on settlements.
Gasoline futures got a boost from a tightening supply picture this week, ahead of seasonal refinery maintenance in October which is expected to lower production.
Gasoline stockpiles in the five states around the New York Harbor, the delivery point of the New York Mercantile Exchange's RBOB contract, dropped in the week to September 21 to the lowest level in records which go back to 1990, according to data released by the U.S. Energy Information Administration on Wednesday.
U.S. consumer spending rose in August by the most in six months, according to Commerce Department data released on Friday. But the second straight monthly increase mostly reflected higher gasoline prices, which rose 28.2 cents per gallon last month.
While U.S. consumer sentiment rose to its highest level in four months in September, according to the Thomson Reuters/University of Michigan final reading issued Friday, the rise was shy of economists' forecasts and gave up some of the gains seen in the preliminary September reading.
(Additional reporting by Adam Kerlin in New York, Claire Milhench in London and Manash Goswami in Singapore; Editing by Phil Berlowitz and Jim Marshall)