Oil hits 11-month high above $76

A nodding donkey in a file photo. Oil prices rose to an 11-month high above $76 a barrel on Monday as rising global oil demand and North Sea field maintenance exacerbated supply worries.

NEW YORK (Reuters) - London oil prices rose to an 11-month high above $76 a barrel on Monday on North Sea supply concerns while U.S. crude fell on expectations refinery problems would depress demand in the top consuming nation.

Global benchmark London Brent crude settled up 16 cents at $75.78 a barrel after hitting $76.34 -- the highest level since August 2006 and close to the record high of $78.65 struck on August 8.

"The oil price is at very high levels for good reasons and there's every possibility we could see further strength in coming months," said David Dugdale, an analyst at MFC Global Investment Management.

"With OPEC continuing to withhold oil from the market, the general picture remains one of tightness, with kidnappings in Nigeria, the upcoming hurricane season and ongoing geopolitical concerns all adding to uncertainty over the summer."

U.S. crude settled 62 cents lower at $72.19 a barrel after hitting $73 early on expectations recent Midwest refinery outages in Coffeyville, Kansas, and Whiting, Indiana, would depress demand.

"Crude just got overbought and the Coffeyville and BP Whiting outages will reduce demand for crude in the Midwest," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.

GROWING TIGHTNESS

Expectations that summer maintenance will reduce supplies of crude from North Sea oil fields have also helped boost prices, widening Brent's premium to the U.S. grade and putting second-month September Brent at a premium to other contracts.

Two North Sea oil platforms linked to the key Forties crude stream will undergo scheduled maintenance for 16 days in August, prompting the deferment of 320,000 barrels, energy producer Apache Corp. (APA.N) said.

The International Energy Agency, adviser to 26 industrialized countries, said world oil demand would rise faster than expected to 2012 while supply lags. "Despite four years of high oil prices, this report sees increasing market tightness beyond 2010," the IEA said in its medium-term oil market report.

Ministers from the Organization of Petroleum Exporting Countries (OPEC) disagree, blaming high prices on refinery bottlenecks and geopolitical tensions.

Algeria's Energy and Mines minister, Chakib Khelil, told Reuters there was "not much" OPEC could do to bring down prices as global crude oil stocks were already sufficient.

"There is plenty of stocks. It's a problem with capacity and refining," Khelil said in Brussels.

"Even if it (OPEC) increases production, it's just going to increase stocks and not have any effect because prices are drawn by petroleum product prices."

(Additional reporting by Fayen Wong in Sydney, Janet McBride in London and Matthew Robinson in New York)