Crude Oil Shows good Progress in 11 Month

Crude oil rose to an 11-month high in New York after Total SA lost production and declared force majeure at the Dalia field in Angola.

Total's decision covered half the oil pumped at the offshore field, which had produced 240,000 barrels a day, said Patricia Marie, a company spokeswoman. A generator failure caused the problem. Oil also gained because the U.S. government said gasoline stockpiles fell last week as imports plunged and demand climbed.

The Total news has pushed oil higher ``because it's a serious supply cut,'' said Jon House, a crude oil trader with Macquarie Bank Ltd. in London. The U.S. ``stats were bullish.''

Crude oil for August delivery gained as much as 66 cents, or 0.9 percent, to $75.71 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $75.55 at 11:59 a.m. in London.

Oil companies working in Africa have faced a series of disruptions in the past year. Militant attacks shut down about a quarter of the production in Nigeria, the continent's biggest producer. A fire cut output from Total's N'kossa field in the Republic of Congo, which was due to resume on Aug. 1.

Force majeure, a legal measure that exempts a company from fulfilling a contract because of circumstances beyond its control, was declared at the Angola field yesterday, Marie said. It should be lifted in one or two days, she said.

Another offshore Angolan field, the BP Plc-operated Plutonio, will ship its first crude cargo in September, said two traders with knowledge of the project. Plutonio will start production in the second half of this year, BP spokesman Toby Odone, said declining to give further details.

Brent Gains

Brent crude oil for September settlement jumped as much as 79 cents, or 1 percent, to $77.55 a barrel on the ICE Futures exchange and traded at $77.38 at 12 p.m. in London.

Brent, which is pumped in the North Sea, has been trading at a premium to West Texas Intermediate, the U.S. benchmark, for most of the year. Maintenance in North Sea fields, along with the supply disruptions in Nigeria and lower exports from Russia, are helping to push Brent prices higher.

A Royal Dutch Shell Plc pipeline feeding a Nigerian export terminal has been burning in six places after protesters set fire to it a few weeks ago, Precious Okolobo, a spokesman for the company, said July 17. Some of the sites have been burning since June. Neither production nor exports has been affected, he said.

OAO Transneft, Russia's state oil-pipeline monopoly, exported 4.25 million barrels of crude a day in June, 9.1 percent less than a year earlier and 6.9 percent less than in May.

U.S. Supplies

In the U.S., gasoline supplies dropped by 2.24 million barrels last week and motor-fuel imports fell by 36 percent to 915,000 barrels a day, the Department of Energy said yesterday. Refineries increased their operations to 91 percent of capacity in the period, a seven-week high.

``The runs are slightly increasing and crude oil structure is strengthening,'' said Johannes Benigni, a managing director at PVM Oil Associates GmbH.

Gasoline use in the U.S., the world's largest oil consumer, usually peaks in June or July as holiday travel puts more cars on the road. Demand, based on deliveries from refineries, reached 9.7 million barrels a day last week, the highest since the week ended July 1, 2005, according to the Energy Department data.

Gasoline for August delivery rose 0.97 cent to $2.205 a gallon after surging 4.5 percent to $2.1953 yesterday, the biggest increase since Jan. 30. Prices fell 11 percent in the previous five sessions.

Crude oil inventories fell in the U.S. as refiners increased operating rates. Stockpiles dropped 449,000 barrels to 352.1 million barrels last week, 13 percent more than the five-year average, according to the Department of Energy.

Japan Accident

In Japan, Tokyo Electric Power Co. may keep shut the Kashiwazaki-Kariwa nuclear plant for at least a year, after the government ordered safety checks, Nikkei reported, without saying where it got the information. The utility was shut after an earthquake caused radioactive leaks this week. Tokyo Electric found more faults today and a radioactive leak at a reactor building, the company said in a statement.

Some analysts, including Jennifer Gordon, a trading analyst at Deutsche Bank Securities in New York, expect the company will have to switch to oil.

In U.S. dollars, West Texas Intermediate, the New York-traded crude benchmark, has risen about 4 percent in the past 12 months. Oil has dropped 5 percent in euros, 7 percent in British pounds and rose 9 percent in yen.