Oil rose nearly $1 toward $74 a barrel to settle at a 10-month high on Friday as data in the United States promised economic recovery and a potential revival in energy demand.

U.S. crude for October delivery settled up 98 cents at $73.89 per barrel, the highest settle since October 20. London Brent crude for October settled up 86 cents at $74.19.

Crude rose $6.38 over the week, nearly 10 percent, from the $67.51 settle on August 14.

The primary source of support again tended to be spill over from the financial space that included a weakening dollar and associated strengthening in the stock indexes, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

The dollar was down against the euro, helping to support commodity prices, with investors showing some appetite for risk.

Home sales data for July showed recovery in the U.S. housing market, while Federal Reserve Chairman Ben Bernanke said that the global economy appears to be recovering.

Bernanke told a Fed conference that the global economy was on the mend, though critical challenges remain and recovery is likely to be sluggish.

The U.S. National Association of Realtors said sales of previously owned homes jumped 7.2 percent in July, the fastest sales pace in nearly two years.

U.S. equities rose, sending the S&P 500 index to a 10-month intraday high on economic optimism.

U.S. highway travel was up 2 percent in June compared with a year ago, rising 4.9 billion miles (7.9 million kilometres) to 256.7 billion miles, the U.S. Transportation Department said.

TIGHTER REGULATION

Tighter regulation of the energy market may take the edge off high prices, Commerzbank said in note on Thursday.

The significant rise in the oil price in the first half of the year is due in large part to a recovery in investment by financial investors, analyst Eugen Weinberg at Commerzbank wrote in their Commodities Spotlight Energy newsletter.

If their influence is reduced by the (Commodity Futures Trading Commission's) actions and sanity prevails, the oil price will fall.

The CFTC is widely expected to introduce stricter position limits for nonphysical investors in commodities before the end of 2009.

(Additional reporting by Gene Ramos and Robert Gibbons in New York, Chris Baldwin in London; editing by Marguerita Choy)

Ben Bernanke