NEW YORK (MarketWatch) -- Crude-oil futures turned higher Friday, rising as U.S. stocks largely erased their earlier losses after an upbeat-consumer confidence report.
Stocks and crude futures moved in the same direction in 13 of the past 17 sessions since the beginning of the month, according to data compiled by MarketWatch. Also boosting oil prices, the U.S. dollar weakened against the euro.
Crude for November delivery rose $1.02, or 1.6%, to $66.91 a barrel on the New York Mercantile Exchange, after dropping as low as $65.05 earlier, the lowest level for a front-month contract since July 30.
Oil was "following stocks," said Zachary Oxman, managing director at TrendMax Futures. But "I'd be shorting it. Supplies are plentiful and I see crude moving down from here."
Despite Friday's gain, oil prices, as gauged by front-month contracts, are set to end the week down about 8%, the biggest weekly loss since the five sessions ended July 10.
The selling in oil came "amid questions about the underlying strength in overall commodity demand," said Edward Meir, an analyst at MF Global, in a note to clients. "There has been a marked deterioration in many of the energy charts."
Inventories of crude oil, gasoline and other petroleum products all rose last week, the Energy Information Administration reported Wednesday.
Gasoline supplied, an implied gauge of consumption, fell to 8.79 million barrels a day, the lowest level since late January. Crude imports averaged 9.8 million barrels a day last week, up 10% from a week ago, EIA data showed.
On Wall Street, stocks mostly erased their earlier losses after an index showed consumer sentiment improved in late September.
The consumer-sentiment index jumped to 73.5 in late September from 70.2 earlier in the month, according to Reuters/University of Michigan.
But not all the economic news was upbeat. The incipient recovery in the manufacturing sector stumbled in August, as a big decline in orders for new airplanes pushed total durable-goods orders down 2.4%, the largest decline since January, the Commerce Department reported Friday. See full story.
And sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. See full story.
Other energy futures also moved lower. October reformulated gasoline was almost flat at $1.6372 a gallon, and October heating oil added 1.41 cents, or 0.9%, to $1.6958 a gallon.
October natural gas slid 3.9 cents, or 1%, at $3.917 per million British thermal units. See related story on natural-gas producers.
The United States Oil Fund (USO 33.89, -0.08, -0.24%) rose 0.8%, and the United States Natural Gas Fund (UNG 11.87, -0.10, -0.84%) slid 0.3%.
Goldman raises oil-demand forecast
Analysts at Goldman Sachs raised their forecasts Friday for global oil demand for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
"The permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base," wrote Jeffrey Currie and other Goldman analysts in a research note.
At the same time, Goldman maintained its price forecasts, saying that higher anticipated demand has been met by stronger supply, particularly out of Russia and the rest of the former Soviet Union.
As a result, Goldman raised its global supply forecasts by an amount similar to its global demand forecast.
Goldman kept its end-of-year target for benchmark crude prices at $85 a barrel, along with an average 2010 price forecast of $90 a barrel and its end-of-2010 target of $95 a barrel.
