| GEO Business | | Oil rises to near $79, gains 4.35 percent in July | Updated at: 0854 PST, Saturday, July 31, 2010
 NEW YORK: U.S. crude oil futures turned positive to end the month higher on Friday, shrugging off earlier concerns about the pace of economic growth amid mixed data and lifted by a late rally in refined products futures as August contracts expired.
Front-month crude futures prices ended July up $3.29 or 4.35 percent from the end of June, though for the week the ended six cents or 0.07 percent lower.
U.S. crude for September delivery rose 59 cents to settle at $78.95 a barrel, trading from $76.83 to $79.05.
ICE Brent also rose 59 cents to settle at $78.18 a barrel, having traded from $76.20 to $78.31.
Crude futures slumped early on Friday after data showed economic growth in the United States slowed in the second quarter.
Gross domestic product expanded at a 2.4 percent annual rate, just under expectations, after a revised 3.7 percent growth pace in the first quarter.
U.S. consumer sentiment slumped in July to the lowest level since November also provided pressure on oil, although there was a slim improvement in late July from early July, according to a survey of consumers.
Also supportive was a report of positive business activity in the U.S. Midwest and another showing a leading indicator index that was stronger helped pull oil prices off their lows.
"While today's seemingly disappointing GDP report slapped the market down toward yesterday's lows early..., the complex was again able to rebound ... with the help of improved consumer confidence figures as well as an optimistic report regarding Chicago business activity," said Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois.
Sources said end-of-month trading was also a factor in the volatility and that crude prices also gained momentum after an early slump failed to move below the 50-day moving average and support around $76.50 a barrel.
Signs of tepid economic recovery and oil demand growth, along with the rising oil inventories have helped keep oil prices in check as they recovered from a low under $65 in late May.
U.S. stock indexes ended mixed, but the S&P 500 index, closely watched by oil traders, closed higher as stocks wrapped up their best month in a year as strong corporate earnings results offset the impact of poor economic data.
While the euro weakened against the dollar, the greenback hit multi-month lows against the Japanese yen and the dollar index also weakened.
A weak dollar often supports prices for dollar-denominated oil, making it cheaper for buyers using other currencies and lowering the value of the dollars producers receive.
Also supportive to oil were two tropical weather systems in the Atlantic Basin, still being given low chances of strengthening into tropical depressions over the next 48 hours by the U.S. National Hurricane Center.
"There is always a reluctance to be too short and then come back after the weekend and there is a real storm threat," said Phil Flynn, analyst at PFGBest Research in Chicago.
Next week, along with the key U.S. July non-farm payrolls report on Friday, traders will be eyeing U.S. oil inventory reports for impact of the supply disruptions caused by Tropical Storm Bonnie.
Wednesday's report from the U.S. Energy Information Administration showed crude stocks soared unexpectedly last week. |  | | | |
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