LOS ANGELES -- Crude oil futures climbed more than 2% on Friday, buoyed in part by an upward revision to global oil demand for this year.

Crude oil for October delivery recently gained $1.79, or 2.4%, to $76.01 a barrel at the New York Mercantile Exchange. For the week, oil futures are facing a rise of 2%.

"Crude oil is off on its own a little bit today," said Darin Newsom, a senior commodities analyst at Telvent DTN in Omaha, Neb.

"It's a low volume day, and that allows for some large moves to happen. There are a few stories out there, you've got a few orders in and it's helping to push the market higher."

U.S. stocks were mixed, with the S&P 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,110, +5.37, +0.49%) up 0.3% while the Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,242, +6.28, +0.28%) slumped 0.1%.

On Thursday, crude fell slightly as a drop in U.S. weekly jobless claims was overshadowed by inventories data and lingering unease over European banks' health.

But on Friday morning the International Energy Agency said that it had increased its forecast for global oil demand this year by 50,000 barrels a day. The IEA now forecasts demand of 86.6 million barrels a day for 2010. It held its forecast for 2011 at 87.9 million barrels a day.

Also boosting prices, the Energy Information Administration said crude-oil inventories for the week ended Sept. 3 fell by 1.9 million barrels, far less than a trade group estimated late Wednesday.

Hopes for oil demand were also lifted in Asia on Friday after Japan raised its second-quarter growth estimate and after China said its imports of crude rose in July.

"You'll see the knee-jerk reaction," to China-related data as the country's financial well-being and economic status has an effect on commodity markets, said Newsom.

"But longer-term, we have to go back to underlying fundamentals. Growth in demand is a huge question mark. We're going to see short-term [price] spikes as money moves from one market to the next. Until we see something substantial change in the fundamentals, it's more than likely these types of moves aren't going to hold."

Newsom said the market appears "well overvalued" and that charts indicate prices could reach the low $50-a-barrel price range this winter.

"Now, will it happen? It still seems to find these pockets of strong support. Until we chew through all of those, it's probably not going to happen anytime so. But it does remain a possibility," he said.

Natural gas for October delivery rose 12 cents, or 3.1%, to $3.89 per million British thermal units (BTUs).

Brian Niemiec of Susquehanna Financial Group said natural gas prices are up partly because of short-covering ahead of the weekend and speculation about Tropical Depression Igor, which continues to strengthen in the Atlantic Ocean.

"No one knows if it's going to hit the Gulf of Mexico," Niemiec said.

Gas was in the headlines Friday morning after a natural-gas-line explosion in a San Francisco suburb destroyed more than 50 homes and damaged more than 100. The line was owned by utility PG&E Corp. /quotes/comstock/13*!pcg/quotes/nls/pcg (PCG 44.35, -3.89, -8.06%) , which saw its shares fall by more than 5% in Friday morning trading. Read in full about the explosion's impact on PG&E's stock.

Susquehanna's Niemiec said the explosion in California is probably not a factor in the run-up in natural gas prices.

Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Nick Godt is MarketWatch's markets editor, based in New York.

Source: http://www.marketwatch.com/story/crude-oil-rises-on-asian-economic-hopes-2010-09-10