* U.S. demand set to rise as driving season kicks off
* U.S. forecasts intense 2010 hurricane season
* Coming Up: US consumption for April; 1230 GMT
(Adds comment, updates prices)
By Alejandro Barbajosa
SINGAPORE, May 28 (Reuters) - Oil touched a two-week high
above $75 on Friday, heading for the first weekly gain in
almost a month, on rallying stock markets and expectations of
rising U.S. consumption during the summer holiday season.
Oil prices recorded their biggest two-day gain since
mid-August over the past two days as official data showed
soaring fuel demand in top consumer United States and China
assured that Europe remained a key investment market for its
foreign-exchange reserves. []
Asian stocks rallied for a third straight day on Friday,
with Japan's benchmark Nikkei <> rising over 1.7 percent
to its highest this week, following a Wall Street rally the
previous day. []
U.S. crude for July delivery <CLc1> rose as much as 90
cents to $75.45 and was up 25 cents at $74.80 at 0552 GMT,
while ICE Brent <LCOc1> climbed 24 cents to $74.90.
"Given where we are in the cycle of the demand for crude,
we are at the beginning of a recovery in the price," said
Jonathan Barratt, managing director at Commodity Broking
Services in Sydney.
Prices fell to $67.15 just three days ago, the lowest level
since September, excluding a May 20 trough below $65 as the
June contract expired. They have gained almost 7 percent this
week.
"I feel that given the velocity of the move, the market
will look to buy crude. Dips will be well supported at $72,"
Barratt said.
Traders also focused on forecasts for an intense Atlantic
hurricane season that revived concerns of disruption to
supplies in the Gulf of Mexico, where BP's attempt to plug a
gushing oil well was proceeding to plan.
In its first outlook for the hurricane season that begins
in June, the U.S. National Oceanic and Atmospheric
Administration forecast 14 to 23 named storms, with eight to 14
turning into hurricanes, nearly matching 2005's record of 15.
[]
Hurricanes Katrina and Rita devastated offshore oil fields
and refineries across Louisiana and Texas in 2005, causing the
most severe disruption to U.S. supplies related to a natural
disaster.
DRIVING SEASON KICKS OFF
The U.S. driving season, when motor fuel demand reaches its
annual peak, starts this weekend with the U.S. Memorial Day
holiday, running until Labour Day in early September.
"From the fundamental point of view, it's gasoline demand
and forecasts that the hurricane season may be more active than
expected" that are boosting prices, Barratt said.
U.S. diesel demand for trucking and industry is also
rising, a weekly government report showed on Wednesday.
Oil demand in the U.S. climbed almost 7 percent over the
past four weeks, the Energy Information Administration said,
led by a 16 percent jump in demand for distillates, a category
that includes diesel and heating oil.
The U.S. economy grew at a slightly slower pace than
previously estimated in the first quarter but the recovery
still appeared solid, suggesting the economy could withstand
fallout from the European debt crisis. []
"People are re-focusing on the respectable economic data
from the U.S.," said Tony Nunan, a risk manager with
Tokyo-based Mitsubishi Corp.
Industry data provider Genscape on Thursday said crude
inventories at the U.S. pricing point of Cushing, Oklahoma hit
another record high in the week to May 25, rising 478,000
barrels to 39.9 million barrels, from a week earlier.
[]
(Editing by Himani Sarkar)
