Oil higher on stimulus hopes, weaker dollar

NEW YORK (Reuters) - Oil prices rose a fourth day on Friday on hopes for more stimulus from the U.S. Federal Reserve and the weaker dollar after data showed U.S. economic growth slowed in the second quarter as expected .

Dollar-denominated crude futures received additional lift from the euro's strength and the dollar's weakness <.dxy> after French leader Francois Hollande and his German counterpart, Angela Merkel, said they are determined to do all they can to safeguard the single currency.

The French and German comments followed Thursday's stock market and oil move higher after European Central Bank President Mario Draghi said the ECB was ready to do whatever it takes within its mandate to preserve the euro.

Sputtering U.S. growth has encouraged some economists and market participants to expect that the Federal Reserve will act to provide more economic stimulus, a move that would probably weaken the dollar.

"Financial markets see a benign mix of gently rising risk appetite as worries over an imminent euro zone disaster ease and prospects for another U.S. stimulus increase," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.

Brent September crude rose 84 cents to $106.10 a barrel by 1:59 p.m. EDT (1759 GMT), having swung from $105.02 to $106.50. The premium to October Brent stayed above $1 a barrel.

U.S. September crude was up 73 cents at $90.12 a barrel, having traded from $89.13 to $90.45.

Total Brent crude trading volume lagged the 30-day average by 41 percent, while U.S. turnover trailed its 30-day average by 45 percent.

This week's string of advances still left Brent and U.S. front-month prices on pace to post weekly losses. Brent requires a settlement above $106.83, and U.S. above $91.44, to avoid finishing the week lower.

But both contracts stayed on track to register healthy monthly gains next week, after both Brent and U.S. crude suffered double-digit tumbles in the second quarter.

Oil prices held gains after the Thomson Reuters/University of Michigan final reading showed U.S. consumer sentiment fell in July to its lowest level of the year.

U.S. economic growth slowed as expected in the second quarter, expanding at an annual rate of 1.5 percent, leaving open the door for the Federal Reserve to decide additional stimulus is needed.

"The 1.5 percent reading may make somewhat more difficult for the Federal Reserve to embark on additional easing, but does not preclude it in the least," said John Kilduff, partner at Again Capital LLC in New York.

"The prospect for easing will be supportive for crude oil, other commodities and equities," he added.

U.S. stocks advanced on the expectations for more central bank action, with the S&P 500 reaching the highest level since May 4. <.n/>

The Thomson Reuters-Jefferies CRB index <.crb>, a commodity market bellwether containing 19 components, pushed up 0.62 percent.

MIDDLE EAST UNCERTAINTY PERSISTS

The violence and turmoil in Syria and tension between the West and Iran over the disputed Iranian nuclear program continue to fuel uncertainty in oil markets.

President Bashar al-Assad's forces renewed a ground and aerial bombardment of Aleppo on Friday, extending efforts to crush rebels in Syria's commercial capital in what the United States said it feared could become a massacre.

Iran has allocated billions of dollars to insure its oil tankers itself, the semi-official Fars news agency reported on Friday, Tehran's latest effort get oil to buyers through the financing obstacles set by Western sanctions.

In addition to an embargo on purchasing Iranian oil, the European Union on July 1 imposed a ban on insurance for tankers carrying Iranian oil.

Iranian tensions and expectations that central banks will continue to print money caused analysts in a monthly Reuters poll to project higher average prices for Brent and U.S. crude for 2013.

(Additional reporting by Gene Ramos in New York, Christopher Johnson in New York and Luke Pachymuthu in Singapore; Editing by Marguerita Choy and David Gregorio)

Source: http://news.yahoo.com/brent-trades-over-105-supported-ecb-comments-u-030254537--finance.html

lawrence lessig lawrence lessig time magazine person of the year 2011 time magazine person of the year 2011 new orleans jazz fest new orleans jazz fest louis ck