* U.S. economic data restores some optimism to markets
* Oil prices seen firmly in $70-75 range
* Weaker dollar offers boost to oil and commodities
(Updates prices, JP Morgan comments, China stocks)
By Ramthan Hussain
SINGAPORE, Aug 28 (Reuters) - Oil climbed towards $73 on
Friday after snapping a two-day fall a day ago from 10-month
highs, boosted by better-than-expected GDP and jobs data in the
United States that signal the economic recovery is on track.
Crude oil prices were also given a lift by a weaker U.S.
dollar versus the euro <EUR=> and the commodity-linked
Australian dollar, as well as by a late rebound on Wall Street,
but were tempered by falls in Chinese stocks.
U.S. crude for October <CLc1> gained 34 cents to $72.83 a
barrel by 0637 GMT, rising further after jumping $1.06 on
Thursday. Prices had fallen as low as $69.83 earlier the
previous day on worries about high U.S. crude and heating oil
stocks and weak demand, retreating from a high of $75 this
week.
London Brent crude <LCOc1> rose 22 cents to $72.73.
"People are still looking at the stock markets and the
weaker U.S. dollar against the euro, but the market still lacks
clear direction," said Ken Hasegawa, a commodity derivatives
sales manager at broker Newedge in Tokyo.
"A lot of people are expecting the economy to go well and
the stock market to rise further, but I cannot be so optimistic
about the economy. Though it has reached a bottom, real
recovery will take two to three years -- I don't see a
"V"-shaped recovery."
Analysts expect oil prices to hold firmly in the $70-75
range for some time.
The less-than-expected contraction in the U.S. economy in
the second quarter, despite a record drop in inventories, and
fewer workers filing new claims for jobless benefits, also
cheered other commodities, including industrial metals such as
copper.
Oil's recovery and the weaker dollar -- which later edged
up after the sell-off -- also supported gold, bought as a hedge
against inflation.
Traders will now watch the Michigan business sentiment
survey on Friday for signals that the economy is truly healing,
and eye British, French, Swedish and Italian data for clues on
how the Eurozone recovery is developing.
GUARDED CONFIDENCE
Asserting the cautious view on the economy and its impact
on fuel demand, JP Morgan said in a report:
"Despite our confidence in the recovery process over the
next six months, there is precious little indication from the
energy side that industrial activity in the U.S. is recovering.
"Gasoline demand remains weak (and may even be declining),
jet-fuel has troughed at a low level, and the middle distillate
market remains on a disturbingly aggressive downward path."
In Asia, investors continued to watch moves by China to
curb lending and overcapacity, which is still sending chills
among equities investors. Shanghai stocks <> lost over 2
percent and Hong Kong 0.5 percent, as banks fell on reports
that August lending on the mainland had shrunk, trimming market
liquidity.
Oil also has yet to receive much support from the 2009
Atlantic hurricane season.
Tropical Storm Danny weakened in the Atlantic Ocean on
Thursday and was no longer expected to become a hurricane, but
edged closer to the U.S. coast on a path that could take it to
Canada's Atlantic provinces by Sunday. []
(Editing by Ben Tan)
