--Nymex crude gains $1.82 a barrel in last four days
--EIA revised data shows resilient February U.S. oil demand
--Late short-covering sets up challenge to key $105.10-a-barrel area
By David Bird
Crude oil futures settled 38 cents a barrel higher at $104.93 a barrel Friday, as a late bout of short-covering pushed prices up for a fourth day.
Prices had danced around either side of unchanged for much of the session, slipping in early trading on lower-than-expected growth in U.S. first quarter gross domestic product. The figure rose just 2.2%, while economists surveyed by Dow Jones Newswires had expected the Commerce Department to report a 2.6% increase.
But with equities moving higher and the dollar weaker, buyers pushed crude through the 200-day moving average of $104.90 a barrel to settle at the highest level since April 2.
Traders said U.S. crude prices, stuck in a $100-$105 range this month, now look set for a challenge of the $105.10-a-barrel level next week. That's a key point on trading charts and equal to the 50-day moving average price.
"They've been attacking the market from both sides and it didn't move, but now it looks like the bulls are taking control again," said Gene McGillian, broker and analyst at Tradition Energy.
The Energy Information Administration released revised February oil demand data Friday afternoon which showed consumption in the world's biggest oil consumer was stronger than preliminary indications, despite higher prices for crude and refined products like gasoline and diesel fuel.
"There is no question that some late-day buying spurred off that news," said Tony Rosado, broker at GA Global Markets.
U.S. oil demand in February fell from a year earlier for the 11th straight month, the EIA data showed. But the drop of just 135,000 barrels a day, or 0.7%, to 18.734 million barrels a day was far less than preliminary estimates, which indicated a 3.1% decline. Demand was up in February from January by 466,000 barrels a day, or 2.6%, the biggest month-to-month rise since August 2011.
Gasoline demand averaged 8.622 million barrels a day, down just 0.3% from a year earlier. Preliminary indications had put the decline at 3.6%.
Demand for distillate fuel--diesel and heating oil--was 2.1% above a year earlier, at 3.954 million barrels a day. That is the highest level for February since 2008, despite extraordinarily warm weather in the month.
The revised number is a sharp revision from earlier indications showing distillate use falling 7.5% to 3.579 million barrels a day, which would have been the lowest in the month since 1999.
Within the distillate figure, demand for ultralow sulfur diesel fuel, used in trucks and trains, rose 1.3%, or 43,000 barrels a day, to 3.393 million barrels a day, the highest in any month since November 2011.
ICE Brent crude for June settled 9 cents lower at $119.83 a barrel. Traders cited worries about a flare-up in the European debt crisis as keeping pressure on prices, with the focus on Spain, where unemployment was reported to have hit an 18-year high.
Reacting to Spain's deteriorating economic and financial outlook, international credit ratings agency Standard and Poor's Corp. late Thursday downgraded Spanish government debt to BBB-plus from A.
Tom Bentz, director at BNP Paribas Prime Brokerage, said, "the market's watching Spain very closely. It's going to be a rocky road and can affect the demand side of the picture."
Reformulated gasoline blendstock futures for May delivery settled up 2.29 cents, at $3.2062 a gallon, the most since April 17. The contract had lost more than 17 cents, with losses in eight of the 10 previous trading days heading into Friday. May heating oil futures settled 1.37 cents lower at $3.1807 a gallon. Both contracts expire at Monday's settlement.
More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
-By David Bird, Dow Jones Newswires; 212-416-2141; [email protected]