Oil up third day on China GDP, North Sea problems

An employee holds a gas pump at a gas station of Hyundai Oilbank in Seoul June 15, 2012.

NEW YORK (Reuters) - Oil prices rose for a third day on Friday after China reported GDP data in line with expectations and slightly above the government's target, soothing concerns about slowing growth in the world's second largest economy.

North Sea production problems also helped boost oil, enabling Brent and U.S. crude to scale their 50-day moving averages as both contracts headed for weekly gains.

August loadings of North Sea Forties crude may be delayed following production problems at the Buzzard oil field, which feeds into the Forties stream.

Relief over China's second-quarter growth helped boost U.S. stock indexes more than 1 percent and also supported European stocks, while the euro seesawed against the dollar and the dollar index .DXY was also choppy. .N <USD/>

"The headline GDP print of 7.6 percent was far from jaw-dropping stuff," said Tim Waterer, senior trader at CMC Markets, in a report. "However, it was a case of small mercies for the market, with risk assets able to claw back some ground."

Brent August crude jumped $1.73 to $102.80 a barrel by 2:47 p.m. EDT (1847 GMT), reaching $103.44 intraday and moving above its 50-day moving average for the first time since April when it pushed past $101.65.

Brent was headed for a weekly gain of more than 4 percent, with the front-month August contract expiring on Monday.

U.S. crude rose $1.02 to settle at $87.10 a barrel, after reaching $87.61. It scaled the front-month 50-day moving average of $87.50, pushing above it for the first time since early May on its way to posting a 3.14 percent gain for the week.

The North Sea outages, the effect of Norway's recent strike, the European Union's (EU) embargo on Iranian oil and uncertainty about the dispute over Tehran's nuclear program lent support to crude, especially Brent, and its front-month strength and premium to U.S. crude.

Brent's premium to U.S. crude increased to more than $15 a barrel and the premium of front-month Brent over September Brent rose and hovered near $1.

"Brent's strength in the front-month is supported by the embargo on Iran and the uncertainty about the talks on its nuclear program, along with the effect of the Norway strike and whether or not OPEC starts to seriously consider cutting production," said John Kilduff, partner at Again Capital LLC in New York.

FRAGILE CHINA

China's year-on-year growth of 7.6 percent in the second quarter was a whisker above the government's official 7.5 percent full year target and dragged the first half average down to 7.8 percent - below the 8 percent level that previously has triggered action from policymakers to bolster the economy.

Growth slowed for a sixth consecutive quarter to its weakest pace in more than three years due to weakness in China and its biggest markets, the European Union and the United States.

China's implied oil demand for June was down 0.4 percent year-on-year, contracting for the second time in three months as refineries scaled back production.

NORTH SEA PRODUCTION LOWER

The problems at the North Sea Buzzard oil field earlier this week mean that North Sea oil exports are expected to fall to a new 2012 low in August.

Buzzard output returned to normal on Friday, according to traders.

Norway's government late on Monday ordered a settlement to a dispute between striking offshore oil workers and employers, preventing a complete shutdown of production threatened by industry, but traders and analysts expect the impact on output to be supportive to prices near term.

IRAN AND SANCTIONS

Analysts also cited the U.S. efforts on Thursday to ratchet up sanctions and limit Iran's ability to export oil, with the Treasury department exposing dozens of front companies, tankers and banks that were helping Tehran evade restrictions.

The measures underpin U.S. and EU sanctions designed to deprive Iran of oil revenue and pressure Tehran to curb its nuclear program, which Tehran maintains is solely for peaceful purposes but which the West believes is for weapons development.

(Additional reporting by Gene Ramos in New York, Claire Milhench in London and Florence Tan and Manash Goswami in Singapore; Editing by David Gregorio and Phil Berlowitz)