* Crude prices gain nearly 13 percent since Oct. 7
* U.S. industrial production grew last month-Data
* Oil investors shrug off lower equities, stronger dollar
(Updates throughout)
By Joshua Schneyer
NEW YORK, Oct 16 (Reuters) - Crude oil rose to a one-year
high above $78 a barrel on Friday after data showed U.S.
industrial production expanded in September, boosting optimism
for an economic recovery.
Oil prices have surged 12.9 percent, or nearly $9 a barrel,
in seven consecutive trading days since Oct. 7.
U.S. industrial production rose in September for a third
consecutive month, by 0.7 percent, Federal Reserve data showed
Friday. []
Increasing factory output stoked optimism that industrial
demand for fuel may rise, prompting fuel stock drawdowns in the
world's biggest energy consumer. Government data showed
Thursday a 5.2-million-barrel drawdown in gasoline stocks last
week, the biggest decline in over a year. []
Bullish industrial data helped investors shrug off factors
that typically pressure oil prices, including a dip in U.S.
stocks Friday following disappointing earnings from General
Electric <GE.N>, and a stronger dollar. <.SPX> <.DXY>
"People think the financial supports are still there to
lift oil to a higher level," said Tim Evans, analyst at Citi
Futures Perspective in New York. "The crude oil market is
reacting to supportive data and willing to overlook anything
that doesn't fit the picture."
U.S. crude oil futures <CLc1> rose by 95 cents a barrel to
$78.53, their highest settlement price in a year.
Brent crude <LCOc1> settled up 76 cents at $76.99.
The U.S. currency's recent plunge to a 14-month low against
a basket of other currencies helped oil to rise 9.4 percent
this week. The dollar gained Friday, although it lost some of
its earlier strength in afternoon trade. <.DXY>
U.S. stocks also rebounded slightly from earlier lows in
afternoon trade.
Unseasonably cold weather in the U.S. Northeast, and the
specter of storms hitting the top regional consumer of heating
oil over the weekend, also helped push up oil prices.
Two complex coastal storms are expected along the U.S.
Mid-Atlantic and Northeast coast during the next few days,
according to forecaster DTN Meteorlogix.
Oil had fallen earlier Friday, as some analysts questioned
whether the commodity's recent rally was justified, with
inventories of crude oil and refined products in the United
States, the world's largest energy consumer, still above
year-ago levels.
"If you look at the stock situation you will not be buying.
There is still an awful lot of stocks," Rob Montefusco, an oil
trader with Sucden Financial in London, said.
U.S. crude and product stocks, excluding strategic
reserves, remained above 1.1 billion barrels in the week
through Oct. 9, according to weekly Energy Information
Administration data released Thursday. Stocks were up from
year-ago levels of 976 million barrels. []
(Additional reporting by Gene Ramos in New York, Ikuko
Kurahone in London and Jennifer Tan in Singapore; Editing by
Christian Wiessner)
