Oil rose further above $72 on Friday after snapping a two-day fall from 10-month highs a day ago, boosted by better-than-expected GDP and jobs data in the United States that signal the economic recovery is on track.
Crude oil prices were also given a lift by a weaker U.S. dollar versus the euro and the commodity-linked Australian dollar, as well as by a late rebound on Wall Street, but were tempered by falls in Chinese stocks.
U.S. crude for October gained 11 cents to $72.61 a barrel by 0301 GMT, rising further after jumping $1.06 on Thursday. Prices had fallen as low as $69.83 earlier the previous day on worries about high U.S. crude and heating oil stocks and weak demand, retreating from a high of $75 this week.
London Brent crude was flat at $72.51.
People are still looking at the stock markets and the weaker U.S. dollar against the euro, but the market still lacks clear direction, said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo, adding that it would take up to a month for a clearer direction to emerge.
A lot of people are expecting the economy to go well and the stock market to rise further, but I cannot be so optimistic about the economy. Though it has reached a bottom, real recovery will take two to three years -- I don't see a V-shaped recovery.
Analysts expect oil prices to hold in the $70-75 range for some time but not any higher.
The less-than-expected contraction in the U.S. economy in the second quarter, despite a record drop in inventories, and fewer workers filing new claims for jobless benefits, also cheered other commodities, including industrial metals such as copper.
Traders will now watch the Michigan business sentiment survey on Friday for signals that the economy is truly healing, and eye British, French, Swedish and Italian data for clues on how the Eurozone recovery is developing.
In Asia, investors continued to watch any moves by China to
clamp down on lending and curb overcapacity, which is still causing chills among equities investors, sending Shanghai stocks down 3 percent and Hong Kong 0.8 percent lower.
The Chinese market has surged more than 90 percent from the start of the year to early August, but fell by more than 15 percent since, sparking concerns over speculation. This prompted a senior finance ministry researcher to say on Friday that rising Chinese property and share prices mainly reflect economic fundamentals rather than a reappearance of asset bubbles.
On the supply side, OPEC seaborne oil exports, excluding Angola and Ecuador, will fall 140,000 barrels per day (bpd) in the four weeks to September 12, an analyst who tracks future shipments said.
Exports from the group will drop to 22.53 million bpd on average, from 22.67 million bpd in the four weeks to August 15, due to a sharp decline in eastbound shipments, UK consultancy Oil Movements said in its latest weekly estimate.
Oil also has yet to receive much support from the 2009 Atlantic hurricane season.
Tropical Storm Danny weakened in the Atlantic Ocean on Thursday and was no longer expected to become a hurricane, but edged closer to the U.S. coast on a path that could take it to Canada's Atlantic provinces by Sunday.
(Editing by Clarence Fernandez)