* Prices hover below $80 after US GDP rose 3.5 percent in Q3
* Concern flares about recovery after producer warnings
* Dollar firms with more data in focus after GDP cheer
(Updates prices, adds euro zone data)
By Emma Farge
LONDON, Oct 30 (Reuters) - Oil prices hovered below $80 a
barrel on Friday following a 3 percent jump the previous day as
doubts that oil prices may have run ahead of supply and demand
fundamentals tempered the sentiment-fuelled rally.
Oil prices jumped on Thursday, while U.S. stocks logged
their best one-day percentage gain in three months, as investors
saw data showing the U.S. economy returned to growth in the
third quarter as brightening the outlook for profits and oil
demand [].
The world's largest economy grew at an annualised rate of 3.5
percent in the July-September period, beating forecasts of a 3.3
percent rise and ending a deep slump. []
U.S. crude for December delivery <CLc1> fell 29 cents to
$79.58 a barrel by 1032 GMT, after trading above the key $80 a
barrel level in early trade. London Brent crude <LCOc1> slipped
43 cents to $77.61.
Thursday's sharp rise crowned October gains, setting crude
on course for a 13 percent rise this month, after a broadly
positive corporate earnings season prompted many investors to
bet on further oil price rises.
"With the fervent mood sweeping oil markets on Thursday the
F word - fundamentals - still seems to be far from many minds,"
said JBC Energy analyst David Wech.
A more sage assessment of supply and demand fundamentals is
likely to trigger a price correction, he added.
"Oil still looks to be overpriced and an increase in GDP
after four quarters of decreases does not mean the United
States, or the rest of the world, is out of the woods."
BRIMMING INVENTORIES
Exxon Mobil Corp <XOM.N>, Royal Dutch Shell Plc <RDSa.L> and
Eni SpA <ENI.MI> dashed hopes for an imminent turnaround for the
oil industry on Thursday, saying sluggish economic recovery was
weighing on energy demand and prices. []
Bearish comments from the trio followed data on Wednesday
showing a surprise build in U.S. gasoline inventories. []
Global oil product stocks stored at sea are also brimming,
with floating storage estimates near 80 million barrels.
News from the euro zone on Friday that unemployment rose to
a near 11-year high of over 15 million also doused the positive
sentiment. []
Analysts said traders were awaiting more U.S. economic data
on Friday to gauge if the pace of recovery in the world's
largest fuel consumer is sustainable.
Friday's data includes the University of Michigan consumer
sentiment survey for October and the Institute of Supply
Management Chicago's October index for manufacturing activity.
[]
This could give the U.S. dollar a steer, analysts said,
after it inched higher versus the euro on Friday. []
Oil prices tend to fall when the dollar rises as it makes
the dollar-denominated commodity more expensive for holders of
other currencies.
"Markets should come around to the likely conclusion that
the dollar should strengthen going forward in the wake of
reviving U.S. growth," said MF Global analyst Edward Meir in a
research note.
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
