* Igor strengthens, no storms set to enter Gulf of Mexico
* Technicals show U.S. crude above $78 []
* Coming Up: Eurozone industrial output for July; 0900 GMT
(Adds China's implied demand, Enbridge update, NYMEX
positions)
By Alejandro Barbajosa
SINGAPORE, Sept 13 (Reuters) - Oil rose to a one-month high
on Monday on strong Chinese demand growth and industrial
output, while an extended shutdown of the biggest Canada-U.S.
crude pipeline raised expectations of declining inventories.
U.S. crude for October <CLc1> climbed as much as 1.4
percent, or $1.05, to $77.50 a barrel, the highest price since
Aug. 12, and was up 97 cents at $77.42 by 0652 GMT. October ICE
Brent <LCOc1> rose 64 cents to $78.80.
Chinese factories ramped up production by a
larger-than-expected 13.9 percent in August, statistics showed
on Saturday, as the economy of the world's second-largest oil
user remained buoyant despite government efforts to clamp down
on bank lending. []
Reflecting accelerating industrial activity, China's
implied oil demand rose 7.4 percent in August from a year
earlier, more than twice as fast as in July, with new
refineries processing more crude to supply robust fuel
consumption. []
"The Chinese data was overwhelmingly positive," said Ben
Westmore, a commodities analyst at National Australia Bank.
"China is in a soft landing after all the stimulus, and
emerging economies are growing quite strongly. In terms of oil
use, that portends strong demand in the coming months."
Enbridge's <ENB.TO> Line 6A, connecting Canadian production
with refineries in the Midwest and the pricing hub for the U.S.
crude benchmark West Texas Intermediate (WTI) at Cushing,
Oklahoma, remained shut following a leak three days earlier.
Although Enbridge found the source of the leak and
completed the drain up of the oil late on Sunday, no date was
set for restoring flows through the 670,000 barrel per day
(bpd) duct, which can carry 7-8 percent of total U.S. crude
imports. [] []
"One of the big concerns has been the stocks at Cushing,"
Westmore said. "The longer the pipeline is down, the more
likely it is that these stocks are going to fall and the market
tighten in that area."
ENVIRONMENTAL OVERSIGHT
Canada is the largest oil exporter to the U.S. and
Enbridge's pipelines carry the lion's share of that. The
shutdown of the company's biggest line might help ease a glut
in Cushing storage.
The leak has the potential to reduce flows to Cushing by
around 300,000 bpd, according to JP Morgan, taking into account
alternative routes and the fact that Line 6A was probably not
being used at full capacity when it leaked.
A section of the pipeline will have to be removed so the
repair can be made, the U.S. Environmental Protection Agency
said. That section will have to be replaced and inspections
done by federal regulators before use of the line can resume.
For a graphic on Enbridge's pipeline configuration:
http://link.reuters.com/qyz52p
Heightened environmental scrutiny following BP's oil spill
in the Gulf of Mexico this year has prevented the resumption of
flows through a smaller Enbridge pipeline that was also closed
because of a leak six weeks ago. For a factbox: []
"Such leaks are not unusual, and in normal circumstances we
would expect the line to be up and running in a matter of
days," but a rapid restart of the most recently shuttered
pipeline is unlikely because of a "lengthy" environmental
review process, JP Morgan said in a note to investors.
The bank expects WTI to return to its usual premium to
Brent. While the front-month contract traded more than $3.50 a
barrel below the European benchmark early last week, on Monday
that discount had shrank to less than $1.40.
DUAL CONFIDENCE
The dollar weakened and Asian equities rose after positive
economic signs also came from top oil consumer the United
States, where wholesale inventories surged the most in two
years in July, according to a report on Friday.
[][]
"You get this dual effect of more confidence in U.S. oil
demand and the fears of a slowdown in emerging economies being
allayed," Westmore said.
Money managers increased net-long crude oil positions on
The New York Mercantile Exchange for the first time in five
weeks in the week ended Sept. 7, the Commodity Futures Trading
Commission said on Friday. []
Hurricane Igor strengthened rapidly over the Atlantic Ocean
on Sunday, becoming a large and dangerous Category 4 storm, but
its forecast trajectory kept it in the Atlantic heading towards
Bermuda at least for the next five days, away from oil and gas
infrastructure in the Gulf of Mexico. []
Behind Igor, the U.S. National Hurricane Center (NHC) said
a tropical depression off the southernmost Cape Verde islands
was just below cyclone strength, poised to become Tropical
Storm Julia at any time.
The NHC was also monitoring a low pressure system over the
east-central Caribbean that it said could develop into a
tropical cyclone over the next couple of days.
(Additional reporting by Erwin Seba in HOUSTON and Aizhu
Chen in BEIJING; Editing by Manash Goswami)
