* Brent hits five-month high above $84
* New York heating oil, ICE gas oil support fundamentals
* French port strike goes on; Houston Ship Channel may close
(Updates prices, adds graphic)
By Ikuko Kurahone
LONDON, Oct 4 (Reuters) - Oil rose to a two-month high on
Monday, bounced from earlier losses, due to the strong Chinese
economy and speculation of further monetary policy easing.
North Sea benchmark Brent crude futures touched about a
five-month high earlier in the day due to the expected fall in
crude oil output in North Sea and the eight-day strikes at
France's top oil port amid early signs of tightening in the
winter fuel market in Europe.
By 1331 GMT, U.S. crude <CLc1> rose 37 cents to $81.95 a
barrel, after touching $82.21 earlier, the highest level since
Aug. 6. Prices have risen about 10 percent since the Sept. 21
close at around $73.50.
ICE Brent crude <LCOc1> hit $84.32, the highest level since
early May, and they were trading 26 cents up at $84.01 by the
same time.
"Prices are still very high and I do not expect to see a big
drop because the U.S. GDP last week was good and the Chinese
economy is still strong," Andy Sommer, analyst with energy
trading firm EGL in Switzerland.
The United States and China are the top two oil consumers.
On Sunday, China's state television reported China's gross
domestic product (GDP) is forecast to rise 9.5 percent in 2010,
accelerating from 9.1 percent in 2009. []
That followed strong manufacturing data from China and the
upward revision for U.S. economic and jobs data last week.
Sommer added oil and global markets might see relatively
high volatility ahead due to the state of global economic
recovery and speculation that the U.S. Federal Reserve might
ease its monetary policy further.
Further easing would likely increase dollar liquidity and
lead to more currency weakness.
A weaker dollar increases the purchasing power of oil and
commodities buyers outside the United States.
BRENT CRUDE
In the third quarter, New York heating oil futures and Brent
crude oil out performed U.S. crude futures. <NEWOILOIL>
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For 2010 commodity performance and heating oil's lead;
http://link.reuters.com/was95p
For North Sea and West African loading volumes []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Harry Tchilinguirian, BNP Paribas' head of commodity markets
strategy, attributed the strength of Brent to falls in North Sea
and West African crude supplies.
"North Sea supplies are moving lower year-on year. West
African outages have a role to play as well in strengthening the
Brent benchmark, notably in view of stronger Asian demand for
their lighter grades," he said.
ICE gas oil, European benchmark for heating fuel, also
struck a five-month high.
"The recent strength in the gas oil and heating oil cracks
has been due to a variety of reasons that have tightened up
prompt availabilities of physical gas oil," Societe Generale's
Mike Wittner said.
"As a result, for the time being, this key part of the
barrel is providing some fundamental leadership to the oil
complex."
In Europe, where oil product supplies are relatively tight,
strikes at France's key oil port crippled output at some
refineries in the region and looked likely to continue on
Monday. []
In the U.S., Houston Ship Channel, the main waterway through
which crude flows into the Texas refining hub, may be closed for
three days after a barge struck a highline electrical tower on
Sunday, downing a power line stretching across the waterway to
the busiest U.S. petrochemical port, the U.S. Coast Guard said.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey and Alison Birrane)
