Oil Rises to One-Month High as Strike Halts Norway Output - report

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Oil rose to its highest in a month in London as China reduced interest rates for the second time in four weeks, while a strike prompted Norway's largest oil producer to announce it would halt production, Bloomberg reported. Brent futures gained as much as 2.6%.

China's one-year lending rate will fall by 31 basis points and the one-year deposit rate will drop by 25 basis points effective tomorrow, the People's Bank of China said on its website today. About 2 million barrels a day of oil equivalent may be affected if a planned lockout of Norwegian oil workers goes ahead, according to Statoil ASA. ( STL ) Oil pared gains as the dollar strengthened after the European Central Bank cut interest rates.

Brent oil for August settlement rallied as much as US$2.57 to US$102.34 a barrel, its highest price since June 7 on the London-based ICE Futures Europe exchange. It was at US$101.37 at 1.09 p.m. local time. The European benchmark's premium to the U.S. benchmark, West Texas Intermediate, rose to US$13.14 from US$12.11 yesterday.

Oil for August delivery on the New York Mercantile Exchange was at US$88.23, up 0.7% from its July 3 close. There was no floor trading yesterday because of the U.S. Independence Day holiday. Transactions since the last close will be booked with today's trades for settlement purposes. Prices are down 11% this year.

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This article appears in: Investing , Commodities

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