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WSJ: Crude Rallies Above $82 On French Strike Impact
 
By David Bird
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Crude oil futures prices rebounded above $82 a barrel at mid-morning Friday, spurred by gains in petroleum products as the impact of a 12-day strike at a key French oil port widened.

The strike continues to block seaborne oil shipments at Fos-Lavera, the world's third-largest oil port, and a union official said Total SA (TOT) informed unions that key units at its 158,000 barrels a day La Mede refinery in southern France will be shut Sunday due to a shortage of crude oil. Some of the refineries served by the port, in France, Switzerland and Germany, said previously they were slowing down operations.

Prices of reformulated gasoline blendstock and heating oil futures rallied Friday, pulling up crude oil, which had been gyrating around $81 a barrel amid swings in the dollar, especially after a weaker-than-expected U.S. September jobs report. The Labor Department said U.S. non-farm payroll in September dropped by 95,000 compared with a consensus estimate of a 10,000 decline. The unemployment rate remained at the August level of 9.6%

At 10:10 a.m. EDT, light sweet crude oil for November delivery was up 64 cents at $82.31 a barrel after moving in a range of $80.30 to $82.57 a barrel.

RBOB and heating oil futures were both up 1.1% at mid-morning on expectations that an escalating supply problem in France would lead to stepped up U.S. exports of petroleum products.

November gasoline blendstock was up 2.29 cents at $2.1402 a gallon, but still below the two-month high hit earlier in the week. Heating oil was up 2.32 cents at $2.2750 a gallon, but below the five-month high hit Wednesday.

"We're starting to see some refinery closures" due to the strike, said Andy Lebow, a senior vice president for energy at MF Global in New York. "That's helping gasoline to rally and pulling crude off the lows."

With U.S. refiners in the midst of a heavy seasonal maintenance season, increased exports could quickly slash inventories.

But total crude oil and products stocks in the U.S. stand at their highest level since the early 1980s, meaning severe reductions would be needed to come close to bring supply and demand closer in line.

"High inventory is an inhibiting factor" to prices soaring into the high $80s, he said.


-By David Bird, Dow Jones Newswires, 212-416-2141; david.bird@dowjones.com
Source