Oil prices extend gains before US GDP data

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World oil prices rose Friday on optimism over the US economic recovery, before publication of key first-quarter growth data, and alongside easing global fears about the Greek debt crisis, analysts said.

London's Brent North Sea crude for June delivery added 43 cents to 87.33 dollars per barrel.

New York's main contract, light sweet crude for June, gained 71 cents to 85.88 dollars.

Crude futures had soared higher on Thursday, in line with rising equity markets, a weaker dollar and strong jobs data, as the energy market was boosted by easing concerns about Greece.

Prices were also supported on Friday by rising equity markets in Asia and Europe after a rally on Wall Street amid encouraging US company results.

"Oil prices advanced strongly (on Thursday) as a weaker US dollar and upbeat jobs data in America offered support," said Westhouse Securities oil analyst David Hart.

"Further gains are possible today, as the highly anticipated first-quarter gross domestic product (GDP) data in the US is released later," he said, adding that expectations were for growth of around 3.3 percent.

The data could be pivotal for the oil market because the United States is the world's biggest energy consuming nation, followed by number two China.

Falling claims for US unemployment benefits had lifted world oil prices on Thursday.

The US Labor Department said initial jobless claims fell for the second straight week, by 11,000, in the week ending April 24.

The claims were higher than expected but the data still "suggests some sort of recovery in the US economy, giving support to crude oil prices," Serene Lim, a Singapore-based analyst with the ANZ bank, told AFP.

Lim and other analysts said news that a bailout package for crisis-hit Greece could be reached soon was also seen to boost global financial markets and oil prices.

"Risk appetite returned to global markets ... on hopes that political momentum is gathering in Europe to provide a substantial aid package to Greece in the immediate future," said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd in Hong Kong.

"There was a clear change of rhetoric coming from EU leaders away from setting conditions on aid towards a recognition that something must be done soon to prevent further contagion," he said in a note.

Greece is in negotiations with the European Union and the International Monetary Fund on a financial bailout that its government says is desperately needed by May 19 in order to avoid a devastating debt default.


© 2010 AFP

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