Oil prices extend gains on eurozone growth data

Oil prices continued to surge in Asian trade Friday as positive economic data from the eurozone raised hopes of a recovery in energy demand, analysts said.  Crude markets were buoyed by better-than-expected growth data on the 16-nation eurozone economy, analysts said.

The eurozone's GDP contracted a mere 0.1% in the second quarter after a 2.5% drop in the January-March period, official data showed Thursday. Germany and France, the eurozone's 2 largest economies, both posted growth of 0.3%, surprising economists and officially confirming the end of the recession in the two countries, analysts said.

"Looking at the breakdown at a country level, it was the German and French economies that produced the real surprises, with both economies advancing 0.3% quarter-on-quarter," said Jan Lambregts, head of regional research with Rabobank.

However, the Commonwealth Bank of Australia stated that oil prices would remain impacted by flagging oil demand in the US, the world's largest energy consumer. "Weak oil demand in the US remains a constraining influence" on oil prices, it said in a report.

The latest government data on US energy reserves showed oil demand remained weak with crude inventories rising by 2.5 million barrels to 352 million barrels in the week ended August 7, more than triple the amount expected by analysts.

It was the third consecutive week of increases in US crude stockpiles.