REFILE-UPDATE 8-Oil up on U.S. data; gasoline jumps on delivery jitters

Fri Nov 9, 2012 4:08pm EST

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* U.S. fiscal worries, Europe's economy weigh on market

* Coming up: CFTC positions data 3:30 p.m. EST Friday

By Adam Kerlin

NEW YORK, Nov 9 (Reuters) - Crude oil futures advanced on Friday, boosted by a rise in U.S. consumer sentiment to a five-year high and upbeat readings on the Chinese economy, while gasoline futures surged even more on speculation over delivery problems and tight supplies in storm-hit New York Harbor.

The harbor, delivery point for the NYMEX gasoline contract, was still in flux 11 days after Superstorm Sandy struck the U.S. Northeast. Many local terminal operations remained constrained, refineries were shut and the retail supply chain was still squeezed. New York City began rationing gasoline for the first time since the 1970s.

Speculation about possible delays in delivering gasoline against the expired November RBOB contract overshadowed broader economic issues, such as concerns over Europe's debt woes and the "fiscal cliff" facing the United States.

Brent December crude settled at $109.40 a barrel after rising as high as $109.78 earlier, snapping three straight weekly declines though still depressed by a host of macro-economic worries.

"The market is still just hovering above its four-month lows," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

U.S. December crude also settled higher, at $86.07, having traded between $84.13 and $86.77 throughout the day.

Brent's stronger gains, supported by RBOBs oil complex-leading rise, brought its premium over U.S. crude to $23.33, up more than a dollar on the day.

However, U.S. gasoline stole the show as the December contract rose nearly 10 cents to close at $2.705.

U.S. 'FISCAL CLIFF'

After initially receiving a boost from the strong U.S. consumer sentiment, equities on Wall Street pared gains after comments by President Barack Obama and House Representatives Speaker John Boehner left investors little hope that a deal to avoid the "fiscal cliff" was on the horizon.

Investors remain cautious that the United States, the world's top oil consumer, is at risk of tipping into recession if it fails to find a compromise to cut its deficit before nearly $600 billion worth of spending cuts and tax increases begin to kick in early next year.

Those concerns, against a backdrop of debt troubles in the euro zone, have weighed on financial markets and led to oil swinging in about a $7 range this week, its widest since late September.

Investors are also monitoring how the United States will tackle the issue of the debt ceiling, which needs to be raised to avoid a government shutdown.

"For the time being, the uncertainty over the fiscal cliff in the U.S. will prevent any price recovery," analysts at Commerzbank in Frankfurt said in a note.

Across the Atlantic, euro-zone finance ministers are to meet on Monday in Brussels. The main topic of their discussions will be thawing the freeze on lending to Greece.

CHINA GROWTH

Supportive October data from China underpinned oil prices on Friday. Infrastructure investment accelerated and output from the country's factories ran at its fastest in five months.

China's October exports rose more than 11 percent from a year ago, and imports grew by 2.8 percent, Commerce Minister Chen Deming said.

The data offered evidence that a cyclical recovery gained strength last month after the Chinese economy in the third quarter suffered the slowest period of growth since early 2009.

Separate data showed U.S. wholesale inventories rose in September by the most in nine months as wholesalers sharply boosted stocks of farm goods and oil. (Reporting by Alice Baghdjian in London, Ramya Venugopal in Singapore and Robert Gibbons in New York; Editing by Alden Bentley, John Wallace and Leslie Adler)

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