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UPDATE 6-Oil rises 2 pct on Europe hopes, US sales data

Published 10/14/2011, 12:19 PM
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(Repeats, justifies tabular material)

* U.S. Sept. retail sales rise at fastest pace in 7 months

* G20 finance chief Paris meeting focus on euro zone woes

* Brent premium to NYMEX crude hits record above $27/bbl

* Coming up: CFTC positions data, 3:30 p.m. EDT Friday (Recasts, updates prices, market activity, changes byline, moves dateline from previous LONDON)

By Robert Gibbons

NEW YORK, Oct 14 (Reuters) - Oil prices rose more than 2 percent on Friday on stronger-than-expected U.S. September retail sales and optimism about prospects that European leaders can fashion a rescue deal on the euro-zone debt crisis.

With Brent's front-month November contract set to expire on Friday, the premium to U.S. crude strengthened and intraday reached a record $27.88 a barrel.

Both crude contracts were on pace to post second consecutive weekly gains.

U.S. retail sales in September grew at their fastest pace in seven months, up 1.1 percent on strong auto purchases. The rise was stronger than economists had expected, and sales for August and July were revised higher as well. [ID:nN1E79D09D]

But despite the September splurge, consumer sentiment slipped in early October more than expected, sending the sentiment measure to the lowest level in more than 30 years.

France and Germany reaffirmed their commitment to a recent deal between their two leaders to combat the euro zone crisis, lending support to oil prices earlier. [ID:nP6E7L6000]

Brent crude for November rose $3.18 to $114.29 a barrel by 12:04 p.m. EDT (1604 GMT), near its $114.46 intraday peak and having pushed above both the 100- and 200-day moving averages for front-month.

Brent December crude rose $2.54 to $111.74, having hit a $112.48 intraday peak.

U.S. November crude was up $2.27 at $86.50 a barrel, having reached $87.28.

U.S. heating oil posted the strongest percentage gain in the oil futures complex as the northern hemisphere heating season approaches.

Broker and industry sources have pointed to Shell's recent Singapore refinery fire, Europe's low stockpiles and U.S. Northeast refineries idled or undergoing maintenance as factors responsible for strong prices.

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Euro zone debt crisis graphics:

http://r.reuters.com/hyb65p

For technical analysis, see [TECH/C]

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The euro zone debt crisis will dominate a summit of G20 finance chiefs and central bank heads in Paris, with a downgrade of Spain's credit rating highlighting the risk of a an economy much larger than Greece coming under threat. [ID:nL5E7LE00R]

Oil prices also received a boost from a dip in Chinese inflation to 6.1 percent in September that raised the possibility the central bank may put on hold further monetary tightening that has slowed economic growth and fuel use. [ID:ID:nL3E7LD1BW] (Additional reporting by Gene Ramos in New York, Emma Farge in London and Florence Tan in Singapore; Editing by David Gregorio)

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