Oil rose above $50 per barrel on Friday as strong earnings news boosted the prospects of energy demand. However, crude gave back most of its daily gains as traders continued to mull another sharp rise in weekly inventories.

Light sweet crude for May delivery ended at $50.33, up 35 cents on the session. Prices spiked as high as $51.37 in early trading.

Oil finished moderately higher for a third straight session, but still closed the week down $1.84. On a longer-term basis, crude has been in a trading range between $47.21 and $54.66 for a month.

Traders showed encouragement with the struggling economy following positive earnings results from General Electric (GE), Google (GOOG) and Citigroup (C).

In economic news, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.

Meanwhile, Federal Reserve Chairman Ben Bernanke offered his support to financial innovation, despite the fact that some of these new products have contributed to the current economic crisis. Bernanke argued that increased regulation would be a better response than eliminating innovation.

Earlier this week, Energy Information Administration data showed crude oil inventories increased by 5.6 million barrels for the week ended April 10. Experts were looking for a build of 2.5 million barrels. Total motor gasoline inventories decreased by 900,000 barrels last week, which is generally in-line with analysts' expectations of a 960,000 drop.

Gasoline prices averaged $2.052 per regular unleaded gallon, according to AAA's daily fuel gauge. This is higher than the month-ago mark of $1.92 per gallon, but still well-off the $3.418 from one-year ago.

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