* Oil hits six-month high of $66.47
* Japan factory output jumps, stimulus boosts demand
* U.S. Q1 GDP revised higher than expected
(Adds detail, updates prices)
By Christopher Johnson
LONDON, May 29 (Reuters) - Oil rose to a six-month high
above $66 per barrel on Friday, on track for its largest monthly
percentage gain in more than a decade, after Japanese and U.S.
data suggested the economic downturn may be moderating.
Oil prices have jumped around 30 percent this month, buoyed
by expectations of a global economic recovery later this year
and a bullish price outlook from key OPEC member Saudi Arabia.
It is the largest monthly price rise since March 1999.
U.S. crude oil for July delivery <CLc1> was up 90 cents at
$65.98 per barrel by 1419 GMT, after reaching a high of $66.47,
its highest level since early November last year.
London Brent crude <LCOc1> gained 65 cents to $65.04.
Data on Friday showed Japanese industrial production rose
5.2 percent in April on a monthly basis, and the government said
it expected continued gains through June. []
U.S. growth data on Friday also reinforced the sense that
the global economic slump might be abating.
The Commerce Department said the world's largest economy
contracted slightly less than initially estimated in the first
quarter, dropping at a 5.7 percent annual rate, rather than the
6.1 percent fall published by the government last month.
The revision was nevertheless below market expectations for
a 5.5 percent contraction for the January-March quarter.
"Oil prices are rising despite weak current fundamentals,"
said David Hufton, managing director of brokers PVM in London.
"They are going up because speculators are hopeful that a
bottom has been reached and an economic recovery is about to
take place which will be V rather than W, U or L-shaped."
U.S. STOCKS
Another supportive influence was Thursday's report by the
U.S. Energy Information Administration on U.S. crude oil stocks,
which fell 5.4 million barrels in the week to May 22, way above
analysts' expectations in a Reuters poll for a 700,000 barrel
decline. []
Gasoline inventories also fell for the fifth week in a row
as demand rose in the week preceding the Memorial Day holiday,
which traditionally marks the start of the summer driving season
in the United States.
"The market has reacted to the headline figures," said Harry
Tchilinguirian, analyst at BNP Paribas in London. "That has
helped extend technical buying as we moved above the
psychologically important 200-day moving average (MA)."
The front month for U.S. crude oil futures crossed up
through its 200-day MA on its daily price chart on Tuesday and
it is now acting as a strong support, according to technical
analysts who track prices on charts.
OPEC's decision to hold oil production steady also helped
prop up prices. The producer group on Thursday kept its output
targets unchanged as expected, betting on a strengthening world
economy and tentative signs of increased demand.
Analysts said Saudi Arabia's statement this week that the
global economy could now cope with $75-80 a barrel oil was a
shift from the world's largest oil producer, which has until
recently hinted it would be happy with a lower price to help the
world economy back on its feet.
(Additional reporting by Fayen Wong in Perth; editing by
Anthony Barker)
