LONDON: Oil edged higher towards $74 a barrel on Friday as investors geared up for the latest measure of economic recovery in the world's largest fuel consumer.
The U.S. government is expected to revise second-quarter gross domestic product growth lower on Friday to an annual pace of 1.4 percent from 2.4 percent, a Reuters survey shows, in what would be another signal of lacklustre economic recovery.
U.S. crude for delivery in October rose 33 cents to $73.69 a barrel by 1102 GMT, after touching an intraday trough of $70.76 on Wednesday, the lowest price since early June. Prices have slid about $10 from a peak near $83 on Aug. 4.
October ICE Brent rose 57 cents to $75.59. "We're trading at the lower end of the $70-80 range, and that may be causing some bargain hunting," said Eugen Weinberg, an oil analyst at Frankfurt-based Commerzbank.
"Markets are definitely waiting for the U.S. GDP and confidence data and the market will be looking at how U.S. equity markets react after the data," Weinberg added.
European equity markets reversed earlier losses, reflecting optimistic sentiment ahead of the U.S. data.
U.S. front-month crude rose by more than 1 percent on Thursday, boosted by a positive U.S. jobs report.
Although new U.S. jobless claims fell by more than expected last week, they were too high to signal a shift in a weak labour market that is constraining economic growth. [ID:nN26186848]
GROWTH CONCERNS Later on Friday in a speech to fellow central bankers, U.S. Federal Reserve Chairman Ben Bernanke is likely to discuss the uncertain prospects for the economy but is not expected to give many clues about whether the central bank will pump in more cash to keep the recovery going. [ID:nN2485884]
Weakness in the consumer sector has slowed energy demand growth in the United States, sending the nation's total petroleum inventories to their highest since weekly records began in 1990.
Bloated U.S. inventories are depressing prices of benchmark West Texas Intermediate crude relative to North Sea Brent. The premium of front-month Brent futures over front-month WTI jumped to as high as $1.80 on Thursday, the widest since early June, and then receded to about $1.65 on Friday.
Tropical Storm Earl in the eastern Atlantic Ocean continued to move westward on Thursday, with the U.S. National Hurricane Center expecting the system to become the season's third hurricane by Saturday.
Early computer models still show the storm moving west and northwest, away from key oil and gas producing areas in the Gulf of Mexico. Hurricane Danielle, which strengthened to Category 3, was also expected to stay in the Atlantic.
