U.S. light crude hit $54.66 a barrel, its highest price since Nov. 28, before easing to $53.60 by 1708 GMT. But it was still up by 87 cents, recovering from a decline of more than a dollar on Wednesday.

London Brent crude rose $1.18 to $52.93.

Oil derived some support from a rally in Asian shares, which rose to their highest in 11 weeks following upbeat U.S. economic data on Wednesday, although European shares fared lower.

Oil prices responded little to a set of gloomy U.S. government data, which showed the U.S GDP fell 6.3 percent, the steepest decline since 1983.

Recovering equities this week as well as a generally weaker U.S. dollar have helped to underpin oil but the rise could be short-lived because of weak fundamentals, analysts said.

“Oil stocks are still very high and if you look at the investment flows, volumes have been very light,” said Olivier Jakob of Petromatrix.

A weaker dollar makes commodities priced in the U.S. unit relatively cheap for holders of other currencies, which can attract investors.

Oil has fallen from highs above $150 last July as the global economic crisis dented energy demand but it has recovered from lows below $35 touched in December partly as a result of export curbs by the Organization of the Petroleum Exporting Countries.

There are signs prices are at least stabilising. A Reuters poll on Wednesday showed a consensus view of analysts that oil prices would average around $50 this year.

“We are seeing some optimism, we are seeing some return of risk appetite, both of which we have not seen for a while…” Mike Wittner, Societe Generale’s global head of oil Research, said. But he too pointed to the high inventories.

On Wednesday, U.S. government data showed an increase in crude oil stocks to their highest levels since 1993. The data also showed falling demand.

Source: March 26 (Reuters)

U.S. stocks were mostly higher in thin trade on Friday, as investors eyed retail sales on the first day of the shopping season after the Thanksgiving Day holiday, to gauge the extent of weakening consumer demand.

European and Asian shares were also higher, despite the attacks in Mumbai, India, while U.S. Treasury debt prices and the U.S. dollar both gained as investors continued to look for safe-havens as global economic growth slows.

“It’s a light volume day so you’re going to see some choppy trading, with so many people out,” said Robert Finkel, consumer trader at Stifel Nicolaus in Baltimore of the U.S. stock market.

“I’m watching how things go from a retail standpoint today – we’ve heard a lot of speculation about how bad it’s going to be, now we’ll get some proper feedback.”

The U.S. holiday weekend will test the strength of consumer sentiment, a main driver of the U.S. economy, as the country faces its worst financial crisis since the Great Depression. If the U.S. consumer fails to buy, companies across the globe can expect to see fewer exports and profits.

The Dow Jones industrial average rose 32.42 points, or 0.4 percent, to 8,759.03. The Standard & Poor’s 500 Index rose 0.66 points, or 0.1 percent, at 888.34. The Nasdaq Composite Index shed 11.99 points, or 0.8 percent, to 1,520.11.

The S&P’s retail index dipped 2.3 percent.

The U.S. stock market was closed Thursday for the Thanksgiving holiday and is trading for half the day on Friday. On Wednesday, stocks ended higher, capping the Dow’s biggest four-day percentage gain since 1932.

Technology shares slid after signs of a downturn in global chip demand as STMicroelectronics cut its fourth-quarter outlook. Industry sources said Taiwan companies want to slash costs. The semiconductor index shed 1.1 percent.

OPEC MEETS

U.S. light crude for January delivery stood at $51.52 a barrel, down $2.90, on course to end the month down more than 20 percent, as OPEC ministers prepared to meet in Cairo to discuss potential further supply cuts to combat a global fall in demand .

In the U.S. Chevron fell 1.9 percent tracking oil lower.

Indian stocks ended higher despite the attacks in Mumbai, but India’s 10-year bond yield fell to its lowest level in three years on expectations that the attacks will an impetus to central bank interest rate cuts.

Globally, the MSCI all-country world index was 0.1 percent firmer, although it has gained more than 10 percent this week, the first weekly gain in four weeks.

“On a range of measures, there is undoubted value to be found in many of the world’s equity markets,” said Sarah Arkle, chief investment officer with Threadneedle Asset Management.

The pan-European FTSEurofirst 300 was up 0.7 percent, as buoyant pharmaceutical shares eclipsed a drop in cyclical mining and industrial sectors.

Earlier, Japan’s Nikkei average climbed 1.7 percent to close out its best week in a month.

The U.S. dollar regained traction against major currencies after early losses. The euro lost 1.8 percent to $1.2656 . The dollar was flat at 95.36 yen .

Benchmark 10-year Treasury notes traded higher in price for a yield of 2.9673 percent. The benchmark yield, which moves inversely to prices, fell to as low as 2.82 percent on Friday, according to Reuters data, marking the lowest in at least five decades.

Overall, benchmark yields are on track for the biggest monthly fall in at least 12 years, according to Reuters data, as investors have stampeded into lower-risk investments on signs of ever-deepening economic distress. The 10-year yield has shed more than a full percentage point since the end of October.

Euro zone government bonds rose, reflecting concern about the economy and expectations of interest rate cuts. Two-year Schatz yields were last down 3 basis points to 2.202 percent.

By Nick Olivari
NEW YORK, Nov 28 (Reuters)