NEW YORK, Jan 2 (Reuters) - U.S. crude oil futures settled
higher on Friday, bouncing from early lows to rally in volatile
trading on Russia's energy dispute with Ukraine, Gaza violence,
and Wall Street's strong kick off to 2009.

Fog-related shipping delays on the U.S. Gulf Coast and a
U.S. Department of Energy announcement about buying crude oil
for the Strategic Petroleum reserve also helped provide lift.

The effect of OPEC's Jan. 1 supply cut of 2.2 million
barrels per day also was seen as a factor offsetting persistent
concerns about demand slowing in a recession economy remain.

"The OPEC cut and Saudi resolve may have put a bottom in.
But this Russia-Ukraine thing is definitely a concern to
European supplies," said Tom Bentz of BNP Paribas Commodity
Futures Inc.

"For now, we are still viewing the price rally of the past
couple of sessions as a low volume holiday related advance that
is being driven largely by an influx of fund capital into the
long side," said Jim Ritterbusch, president at Ritterbusch and
Associates.

Ritterbusch said crude's strength was related to technical
buy signals and also the strength in the stock market.

PRICES

* On the New York Mercantile Exchange, February crude
CLG9 rose $1.74, or 3.9 percent, to settle at $46.34 a
barrel, trading from $41.05 to $46.74.

* Front-month crude finished 2007 at $95.98, rose to a
record $147.27 on July 11, 2008, and hit the 2008 low of $32.40
on Dec. 19, before ending the year at $44.60.

* In London on Friday, February Brent LCOG9 crude rose
$1.32 to settle at $46.91 a barrel, trading from $41.60 to
$47.33.

* NYMEX February RBOB RBG9 rose 4.85 cents, or 4.57
percent, to settle at $1.1105 a gallon, trading from 96.69
cents to $1.1158.

* NYMEX February heating oil HOG9 rose 3.82 cents, or
2.65 percent, to settle at $1.4803 a gallon, trading from
$1.3606 to $1.4974.

* The Feb/Feb RBOB crack spread <0#RB-CL=R> ended at 30
cents. It was flat on Wednesday. The Feb/Feb heating oil crack
spread <0#CL-HO=R> ended at $15.83. It was $15.96 Wednesday.

* The spread between the current front month and the
five-year forward crude contract CLc61 ended at $27.86, based
on the February 2014 contract's Friday settlement at $74.20, up
69 cents on the day. Wednesday's spread was $28.91.

MARKET NEWS

* Fog closed several ports along the central U.S. Gulf
Coast, impeding shipments, officials said. [ID:nN02488598]

* The U.S. Energy Department said it has issued a
solicitation to purchase about 12 million barrels of oil for
the Strategic Petroleum Reserve. [ID:nN02353772]

* European states started suffering from lower Russian gas
supplies on Friday while Moscow accused Kiev of stealing
transit gas a day after deliveries to Ukraine were cut in a
contract dispute. [ID:nL2146741]

* U.S. stocks rose on Friday with the Nasdaq Composite
briefly making a 3 percent gain and large companies in the
technology sector leading the way in the Dow Jones and the
Nasdaq. [.N]

* TAKE A LOOK-Israel attacks Palestinian Gaza Strip
[ID:nLO226261]

* U.S. factory activity fell to a 28-year low in December,
according to an industry report on Friday that showed a more
severe contraction in the sector than expected. [ID:nWEN2173]
(Reporting by Robert Gibbons and Eileen Moustakis; Editing by
Walter Bagley)