Oil rose more than a dollar on Friday after data showed the U.S. economy shrunk less than expected in the second quarter, raising hopes the recession was easing.

U.S. light crude traded up $1.37 to $68.31 a barrel by 1:20 p.m. EDT, reversing earlier losses that sent prices as low as $64.96. London Brent crude gained 49 cents to $70.60 a barrel.

U.S. gross domestic product fell at a 1.0 percent annual rate, the Commerce Department said, below analysts expectations for a 1.5 percent drop.

With the contraction in the second quarter, U.S. GDP has fallen for four straight quarters for the first time since government records started in 1947.

U.S. stocks <.N> traded higher after the data, while the dollar fell as investors pushed into riskier plays.

Crude futures are up as the dollar is getting trashed while equities are starting to pick up some steam, said Tom Knight, trader for Truman Arnold.

Optimism that demand could rise with an economic turnaround has helped lift crude prices from below $33 a barrel in December.

Weak demand sent oil plunging from record highs over $147 a barrel last July, prompting the Organization of the Petroleum Exporting Countries to cut supplies.

U.S. imports of crude from OPEC kingpin Saudi Arabia fell 37 percent versus year-ago levels in May, according to government data released late Thursday.

News that British oil major BP shut Europe's second largest oil refinery after a power outage, as well as the shutdown of gasoline units in France and Germany by Total and a joint venture including Shell , also bolstered prices.

Supplies concerns were further stoked on news Sunoco shut down a gasoline unit at its Girard Point plant in Philadelphia for work.
(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons in New York; Maryelle Demongeot in Singapore and Ikuko Kurahone in London; Editing by Marguerita Choy)