Crude oil gains on Angolan outage

Crude oil futures held above $75 a barrel Thursday, touching a new 11-month intraday high after outage at an Angolan oil field.

A surge in China's economic growth in the second quarter and a fall in U.S. gasoline stockpiles reported Wednesday also supported prices.

Light, sweet crude for August delivery gained 39 cents to $75.44 a barrel on the Nymex Thursday. The contract settled over $75 a barrel on Wednesday for the first time since Aug. 9.

September Brent crude rose 41 cents to $77.17 a barrel on the ICE Futures exchange in London.

"The Angolan news is helping Brent and we're following," said Tony Rosado, of IAG Energy Brokers in Fort Lauderdale, Florida. "It looks like we're going to try and edge up a little higher."

Total SA said an electrical problem Tuesday at its Dalia field in Angola reduced daily output to 127,000 barrels of oil from 240,000 barrels and forced the company to declare force majeure on oil exports. The field is expected to return to full output within one or two days but the reduced output still gave prices, already at 11-month highs, a boost, Dow Jones Newswires reported.

China's gross domestic product growth in the three months to June 30 was 11.9 percent, compared to a year earlier, and faster than the 11.1 percent gain in the first quarter, the country's National Bureau of Statistics said. China's rapid economic growth in recent years has a played a major part in the rise of oil prices.

"China's economy galloping ahead at 11.9 percent in the second quarter, faster than expected, will support the energy complex overall longer term," said Nauman Barakat, senior vice president at Macquarie Futures USA in New York.

In other Nymex trading Thursday, August heating oil futures rose 1.16 to $2.1166 a gallon, while natural gas advanced 15.8 cents to $6.686 per 1,000 cubic feet. The EIA reported that natural gas inventories grew by 65 billion cubic feet last week, in line with analyst expectations.

Crude prices were boosted by sentiment that global demand for oil is growing even as supplies remain unreliable. In addition to Total's announcement, Russian pipeline company Transneft said it exported less oil in June.

"The momentum clearly favors the bulls at this point," said John Kilduff, vice president of risk management at Man Financial Inc.

Many analysts expect Nymex oil traders to test last year's all-time intraday high of $78.40 a barrel. While oil's recent rise is due in part to concerns about crude supplies, it's also due to technical buying and speculation, analysts say.

"It just feels like there is a continual influx of institutional capital into this market every time we make new highs," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

New highs trigger technical buying by large investment funds. The low dollar plays a similar role.

"A lot of foreign capital seems to be seeking safe haven in commodities," Ritterbusch said.

But charting a clear direction on prices is increasingly difficult, analysts say.

"We may be entering a period of crosscurrents and riptides, where tides rapidly shift and change," wrote Peter Beutel, president of U.S. energy risk management firm Cameron Hanover, in a research note. "It is hard to say which way prices want to go from here."

source:www.iht.com