(Updates prices)
By Joe Brock
LONDON, Aug 27 (Reuters) - Oil hovered near $73 a barrel on
Friday, heading for a third straight week of losses on lingering
doubts over the outlook for U.S. oil demand.
The U.S. government is expected to revise second-quarter
gross domestic product growth lower on Friday to an annual pace
of 1.4 percent from 2.4 percent, a Reuters survey shows, in
another signal of lacklustre economic recovery in the world's
biggest fuel consumer.
Friday's negative sentiment eclipsed a positive U.S. jobs
report in the previous session, which helped boost front-month
U.S. crude by almost 1.2 percent on Thursday.
Friday's negative sentiment eclipsed a positive U.S. jobs
report in the previous session, which helped boost front-month
U.S. crude by almost 1.2 percent on Thursday.
October ICE Brent rose 13 cents to $75.15.
"The fundamental picture is very negative," said Jonathan
Barratt, managing director at Commodity Broking Services in
Sydney.
"If you get supportive data in terms of GDP and stimulus,
prices could go to the top of the trading range, but if it comes
lower than expected, the environment is so negative that we
could see a break of $70," he added.
Although new U.S. jobless claims fell by more than expected
last week, they were too high to signal a shift in a weak labour
market that is constraining economic growth.
GROWTH CONCERNS
Later on Friday in a speech to fellow central bankers, U.S.
Federal Reserve Chairman Ben Bernanke is likely to discuss the
uncertain prospects for the economy but is not expected to give
many clues about whether the central bank will pump in more cash
to keep the recovery going.
Weakness in the consumer sector has slowed energy demand
growth in the United States, sending the nation's total
petroleum inventories to their highest since weekly records
began in 1990.
Bloated U.S. inventories are depressing prices of benchmark
West Texas Intermediate crude relative to North Sea Brent. The
premium of front-month Brent futures over front-month WTI jumped
to as high as $1.80 on Thursday, the widest since early June,
and then receded to about $1.65 on Friday.
Tropical Storm Earl in the eastern Atlantic Ocean continued
to move westward on Thursday, with the U.S. National Hurricane
Center expecting the system to become the season's third
hurricane by Saturday.
Early computer models still show the storm moving west and
northwest, away from key oil and gas producing areas in the Gulf
of Mexico. Hurricane Danielle, which strengthened to Category 3,
was also expected to stay in the Atlantic.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Jane Baird)
