Oil prices rose on Friday, bouncing from losses earlier in the day, on support from equity markets and as traders sifted through evidence for hints of economic recovery.

U.S. crude was trading 31 cents higher at $51.43 a barrel by 1217 GMT (8:17 a.m. EDT). Earlier, it fell to as low as $50.43, its first decline after a three-day rally. Brent crude was trading 3 cents lower at $50.77.

U.S. stock index futures rose, pointing to a higher open on Friday.

This week's gains in oil prices were fueled in part by a strong performance on stock markets, with a key European benchmark posting its biggest-ever monthly gain in April led by banks.

But confidence was tempered by auto maker Chrysler's bankruptcy filing on Thursday.

Although the difficulties of the U.S. auto makers have been pretty much factored in, Chrysler's bankruptcy will have some impact on sentiment, said David Moore, chief commodities analyst at the Commonwealth Bank of Australia.

Some traders said support came from tightening supplies of gasoline, which in Europe this week become more expensive than products such as diesel and jet fuel for the first time in more than a year.

In China, the official purchasing managers' index (PMI) for April, rose to 53.5 from 52.4 in March, official data showed on Friday, marking its fifth consecutive month of improvement.

Oil, which has collapsed from a record high of more than $147 last year, has recovered from a low of $32.40 in December and in April posted a third monthly gain of nearly 3 percent.

Still, weak oil demand in the near term and rising crude inventories in the United States -- now at their highest since 1990 -- have slowed the pace.

Prices have recovered by more than 15 percent since the lows of last week. But prices have been caught in a narrow range between $48 and $52 this week.

$50 is also the level that many oil producers, including the Organization of the Petroleum Exporting Countries, are comfortable with.

U.S. factory order data for March due out later in the session are expected to give a better sense of whether the recession in the United States is easing.

Traders were also still cautious about the economic impact of a deadly flu strain.

(Additional reporting by Alex Lawler and Fayen Wong in Perth; editing by Sue Thomas)