Oil prices close in on 80 dollars as US pipeline shut

13th September 2010, Comments 0 comments

Oil prices rose strongly on Monday, nearing 80 dollars following the closure of a key pipeline carrying crude to the United States and strong Chinese industrial data, analysts said.

New York's main contract, light sweet crude for delivery in October, jumped 1.15 dollars to 77.60 dollars a barrel.

Brent North Sea crude for October advanced 75 cents to 78.91 dollars in mid-afternoon London trade.

Thursday's shutdown of the Enbridge pipeline which carries crude from Canada to the US mid-West following a leak was supporting prices, analysts said.

The pipeline carries 670,000 barrels per day or one third of Canada's oil exports to the United States.

"Although the leak ... was stopped on Friday, the line needs to be excavated to locate the leak's precise position and there's no firm timetable yet for getting it back into operation. Disruption of crude supply is inevitable," said Tamas Varga, an analyst at PVM Oil Associates.

Strengthening Chinese industrial output also supported prices, said Victor Shum, an analyst at Purvin and Gertz energy consultants.

"Chinese industrial activity is shifting up and that is certainly bullish for the market," he said.

Official figures released Saturday showed China's industrial output gathering pace, rising 13.9 percent in August after 13.4 percent in July.

"With this weekend's positive Chinese data adding to the already positive sentiment from last week, concerns over the state of the global economy are receding further," said Bjarne Schieldrop, analyst at SEB Commodity Research.


© 2010 AFP

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