Oil prices go above $77 a barrel

Oil prices  jumped above $77 a barrel Monday in Asia, extending gains for a second trading day after a leak forced the closure of a Chicago-area oil pipeline and disrupted supplies to U.S. Midwest refineries.

Benchmark crude for October delivery was up 72 cents to $77.17 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.20 to settle at $76.45 on Friday.

Repair crews are closing in on the source of a leak but haven’t found it yet, Sam Borries, on-scene coordinator for the U.S. Environmental Protection Agency, said Sunday. The 670,000 barrel per day pipeline run by Enbridge Energy Partners carries crude from Canada to the upper Midwest, and the supply disruption has caused a sharp spike in gas prices across that region.

“Markets tend to push higher amidst uncertainty in the process of discounting a worst case scenario until definition is forthcoming,” Ritterbusch and Associates said in a report. “We still view a significant selloff as likely once the pipeline problem is resolved.”

Oil traders also took heart from accelerating Chinese industrial production. Manufacturing rose 13.9 percent in August from a year ago, faster than the 13.4 percent growth pace in July, China said over the weekend.

In other Nymex trading in October contracts, heating oil was up 0.82 cent at $2.113 a gallon and gasoline added 1.64 cents to $1.99 a gallon. Natural gas fell 5.1 cents to $3.832 per 1,000 cubic feet.

In London, Brent crude rose 43 cents to $78.74 a barrel on the ICE Futures exchange.
Source: AP