* U.S. economic growth accelerates in Q4, consumption jumps
* Brent-WTI spread narrows a little from near record $12.50
* U.S. crude to fall below $83.50 -technicals[]
* Coming Up: ECRI U.S. growth index at 1530 GMT
(Updates throughout)
By Christopher Johnson
LONDON, Jan 28 (Reuters) - Oil rose on Friday on news of an
acceleration in U.S. economic growth and higher-than-expected
consumer spending in the world's biggest oil market.
The U.S. economy gathered speed in the fourth quarter. Its
biggest gain in consumer spending in more than four years and
strong exports offered the clearest signals yet that a
sustainable recovery was under way. []
U.S. growth was 3.2 percent year-on-year in the fourth
quarter, the Commerce Department said, after expanding 2.6
percent in the third quarter. For the whole of 2010, the economy
grew 2.9 percent, the biggest gain since 2005.
U.S. crude oil futures for March <CLc1> extended a modest
rise after the data, rising 70 cents, or 0.65 percent, to $86.34
a barrel by 1430 GMT.
The rise outpaced gains in ICE futures in North Sea Brent
crude for March <LCOc1>, which were almost unchanged, 5 cents
higher at $97.44.
This squeezed Brent's premium over its U.S. counterpart
<CL-LCO1=R>, which had earlier stretched to a near record of
more than $12 per barrel, its widest since January 2009.
[]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the Brent-WTI spread, click:
http://link.reuters.com/ceg77r
For a technical analysis, click:
http://graphics.thomsonreuters.com/WT/20112801121947.jpg
For a graphic showing WTI contango, click:
http://link.reuters.com/deg77r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
WTI BRENT
"U.S. consumption is better than expected and that is
undoubtedly positive for demand," said Carsten Fritsch, a
commodities analyst at Commerzbank in Frankfurt.
Near-record stocks in Cushing, Oklahoma, the delivery point
for WTI contracts, have caused prompt-month spreads to collapse
"and the market is now firmly in the supercontango zone",
JPMorgan said in a Jan. 27 note.
In a contango market, the price of oil is progressively more
expensive in future months than the front month.
More Canadian crude is expected to flow into Cushing in
March through an extension of the Keystone pipeline, even though
additional storage capacity is being added, JPMorgan said.
Reuters markets analyst Wang Tao said technical charts
showed Brent's premium to WTI crude would rise to $15.30-$17.63
per barrel over the next four weeks.
However, some analysts were sceptical the Brent-WTI premium
would stay high given that spikes have collapsed previously.
(Editing by Jane Baird)
