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Oil prices rise on North Sea spill

Published: 16:27 15 Aug 2011 BST

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Today’s better than expected reading of Japan’s second quarter GDP and an oil spill in the North Sea drove oil prices up with US benchmark crude tacking on nearly US$2.

Japan said this morning that its economy contracted at an annualised rate of 1.3 percent, while analysts polled by Dow Jones expected to see a 2.7 percent plunge.

The data was interpreted as a sign that the economic impact from the earthquake and subsequent nuclear disaster that hit the world’s third largest economy in March may not be as bad as feared, which bodes well for energy demand.

Asian markets rallied on the update, followed by gains in Europe and the US.

In addition to that, oil prices were pushed higher by the news of an oil spill in the UK’s North Sea caused by an underwater pipeline leak at a platform operated by Royal Dutch Shell (LON:RDSB), raising concerns of disruptions of oil supplies form the North Sea and further restrictions on offshore drilling, which would reduce production.

The company said that about 1,300 barrels of oil has been spilled into the sea. Shell said that the spill is small compared to last year's Macondo accident in the Gulf of Mexico, but added that the leak was still "substantial".

US light, sweet crude for September delivery rose US$1.76 to US$87.14/barrel in morning trade on the New York Mercantile Exchange (NYMEX).

September Brent crude advanced US$1.14 to US$109.28/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Global Petroleum (LON:GBP), up 21 percent at 16.94 pence at midday

Chariot Oil & Gas (LON:CHAR), up 19.5 percent at 145.94 pence

Energi Oil (LON:ENEG)
, up 18 percent at 11.5 pence

Desire Petroleum (LON:DES), up 17 percent at 19.9 pence

Serica Energy (LON:SQZ), up 15.5 percent at 23.12 pence

The top fallers were:

Petro Matad (LON:MATD), down 9.5 percent at 85 pence at midday

Green Dragon Gas (LON:GDG), down 7.5 percent at 8.75 pence

Regal Petroleum (LON:RPT), down 6.5 percent at 38 pence

Sterling Energy (LON:SEY)
, down 5 percent at 38.05 pence

3Legs Resources (LON:3LEG), down 3 percent at 230 pence

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