>Crude gains on softer dollar, equity mkt rebound

Sydney - Crude futures reversed early losses to rise strongly above $67 a barrel in Asian trading Friday, pulled up by a softer U.S. dollar versus the euro and a rebound in equity markets.

Light, sweet crude for September delivery traded up 72 cents at $67.66 a barrel on the Globex electronic platform at 0630 GMT and may be set for more gains later Friday if U.S. GDP data positively surprise.

September Brent crude on London's ICE Futures exchange rose 43 cents to $70.54 a barrel.

The U.S. is the world's largest energy consumer, so any signs that its economic recovery is gathering momentum will help support oil prices. Thursday, the U.S. Labor Department reported a smaller-than-expected rise in new jobless claims, helping the Dow Jones Industrial Average hit a 2009 high.

Economists surveyed by Dow Jones Newswires estimate the U.S. Commerce Department's GDP report will show a contraction of about 1.5% for the second quarter. That would mark a less-severe fall than the first quarter's 5.5% figure, possibly prompting some to declare that an economic bottom has arrived.

Crude futures spent the first few hours of trading on Globex in negative territory, largely due to profit-taking in the wake of the September contract's 5.7% hike on the New York Mercantile Exchange overnight.

Japan's jobless rate in June rising to its highest level in six years also acted as a drag on oil prices. Japan is the world's second-largest importer of crude after the U.S.

Government data showed Japan's unemployment rate rising to 5.4% in June, up from 5.2% in May. The result was slightly above the 5.3% consensus expectation of economists surveyed by and Dow Jones Newswires.

But some positive corporate earnings from the likes of Fujitsu Ltd. and Sharp Corp., following in the wake of a smaller-than-expected loss by Sony Corp. in the April-June period, provided a catalyst for Japan's Nikkei Index to touch a year-to-date intraday high Friday.

Other regional equity markets, including the Hang Seng Index in Hong Kong and the Shanghai Composite Index, were also higher after a turbulent few sessions for stocks.

The September crude contract was also lifted by a 0.5% slide in the U.S. dollar versus the euro to USD1.4141.

David Moore, commodity strategist at Commonwealth Bank of Australia, said trading would continue to be pretty volatile Friday and in coming sessions, with oil prices fluctuating in a fairly broad band.

"I don't think the oil market is especially tight at the moment. It's not far off being balanced, and for that reason I expect there to be a downward bias," he said.

Other analysts also saw limited upside to the current oil price.

"For now, we are viewing the Monday-Tuesday highs around the $69 mark as staunch resistance that should prove capable of containing additional price advances," said Jim Ritterbusch, president of Ritterbusch and Associates.

"Nonetheless, a sharp price sell-off will likely have to await another round of API/EIA statistics next week that are again likely to fall toward the bearish side," he said.

The U.S. Energy Information Administration reported Wednesday that crude oil stockpiles rose by 5.1 million barrels last week as oil imports rose and refiners processed less crude.

At 0630 GMT, oil product futures were higher.

ICE gasoil for August changed hands at $570.75 a metric ton, up $6.00 from Thursday's settlement.

Source: COMMODITIESCONTROL