Oil up slightly above $73 as eyes turn to Bernanke

Oil prices rose slightly on Friday, extending two straight days of gains, as investors looked ahead to comments from the Federal Reserve on the outlook for U.S. economic growth.

By early afternoon in Europe, benchmark crude for October delivery was up 23 cents at $73.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 84 cents to settle at $73.36 on Thursday.

Crude has tumbled to near $70 from a high of $82.55 a barrel earlier this month, drawing buyers in the past two days on the expectation that prices will rebound again.

But the rally was short-lived amid gloom about the global economy. Asian stock markets were mostly weaker Friday and European indexes little changed ahead of key U.S. data -- economic growth figures for the April-June quarter are expected to be revised down later Friday.

"The pull back in oil is driven by corresponding declines in Asian equity markets. Oil will continue to be under pressure because of general pessimism in the market," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.

Federal Reserve Chairman Ben Bernanke is delivering a speech early Friday that investors hope will shed light on how weak the U.S. economy really is and whether the Fed may take more steps to revive it.

"Although oil prices do have upside potential on a long-term perspective, the upside potential in the near term is limited, given record-high U.S. stockpiles and predominantly disappointing U.S. economic data," said a report from Commerzbank in Frankfurt.

In other Nymex trading in September contracts, heating oil rose 0.45 cent to $2.0137 a gallon and gasoline added 0.69 cent to $1.9154 a gallon. Natural gas rose 0.5 cent to $3.822 per 1,000 cubic feet.

In London, Brent crude was up 38 cents at $75.40 a barrel on the ICE Futures exchange.