* U.S. economy grows in Q4 2010, consumers spending
* US crude rise comes after dip on OPEC output boost talk
* Coming up: CFTC positions data at 3:30 p.m. EST Friday
NEW YORK, Jan 28 (Reuters) - U.S. crude oil futures rose sharply on Friday, extending an earlier modest rise after government's preliminary estimate of fourth-quarter 2010 economic activity showed the economy grew at a 3.2 percent annual rate, though that was below expectations for growth of 3.5 percent.
Consumer spending helped fuel the growth, with that increase the biggest since first quarter 2006.
"The data was a mixed bag, with the GDP growth less than expected, but oil had a bullish reaction initially probably on the belief that the Fed will stick with its stimulus policy and perhaps a bounce on the strong consumer spending," said Phil Flynn, analyst at PFGBest Research in Chicago.
"There is growing concern about the situation in Egypt and Yemen and there may be worry about not going into the weekend being too short."
U.S. crude prices fell nearly 2 percent on Thursday on increasing talk and expectations of a possible boost in OPEC output to cool prices, with Brent crude futures having reached $99 a barrel this month.
* On the New York Mercantile Exchange, March crude CLH1 rose $1.43, or 1.43 percent, to $87.07 a barrel at 10:01 a.m. EST (1501 GMT), trading from $85.11 to $86.46.
* The U.S. economy gathered speed in the fourth quarter, if a touch below expectations, with the biggest gain in consumer spending in more than four years and strong exports. [ID:nN27219246]
* OPEC output has risen in January to the highest since December 2008, a Reuters survey found on Friday, suggesting oil prices near $100 a barrel are encouraging the group to pump more oil. [ID:nLDE70R101]
* FACTBOX-Security developments in Egypt: Police fire rubber bullets at thousands of protesters at the prominent al-Azhar mosque in city center. [ID:nLDE70R18U]
* Iran will continue to supply oil to India for the time being, Iranian sources and Indian company officials said on Friday, as the two try to resolve an impasse over payments. [ID:nSGE70R0B9]
* U.S. consumer sentiment improved in late January, as hopes of a stronger economy and more jobs overcame worries about rising costs for food and gasoline, a survey released on Friday showed. [ID:nN28101286]
* The dollar trimmed losses against the yen and gained versus the euro in volatile trading after data showed the U.S. economy gathered speed in the fourth quarter though gains were less than expected. [USD/]
* U.S. Treasury debt prices retreated as news that the U.S. economy gathered speed in the fourth quarter, aided by growth in exports and the biggest consumer spending gain in more than four years, weakened the bid for safe-haven U.S. debt. [ID:nN28338294]
* Copper rose and tin hit another record high, both boosted by supply concerns. [MET/L] 10:01 LAST NET PCT LOW HIGH CURRENT DAY AGO
CHNG CHNG VOL VOL CLc1 87.07 1.43 1.7% 85.11 87.32 185,868 347,753 CLc2 89.54 1.28 1.5% 87.96 89.61 121,982 151,152 LCOc1 97.85 0.49 0.5% 97.14 98.05 87,188 201,584 RBc1 2.3946 0.0130 0.6% 2.3869 2.4044 2,058 21,486 RBc2 2.4295 0.0159 0.7% 2.4112 2.4365 7,259 59,759 HOc1 2.6675 0.0129 0.5% 2.6440 2.673 2,675 23,395 HOc2 2.6678 0.0127 0.5% 2.6425 2.6753 15,915 69,351 * NYMEX crude oil for March CLc1 rose $1.43 to $87.07 a barrel by 10:01 a.m. in volume of 186,841 lots. (Reporting by Robert Gibbons; editing by Jim Marshall)