Crude Closes Above $62

The September contract adds 93 cents to $62.31.
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Updated from 12:10 p.m.

Oil prices rose for a second day Friday as multiple refinery outages and a blowout U.S. employment report had traders worried about supply and demand.

Crude for September delivery closed up 93 cents to $62.31 on Nymex, inching closer to the record high of $62.50 touched earlier this week. Gasoline futures climbed 3 cents to $1.83 a gallon and natural gas prices traded around $8.70 per thousand cubic feet.

Refineries have been operating at full tilt to meet surging demand for gasoline, diesel and heating oil, but the high production rate is also causing more mechanical malfunctions and outages.

Chevron's

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200,000-barrel-a-day unit at its El Segundo refinery has been shut down for two weeks and will probably remain shut for a week more, news reports say.

"Against the backdrop of high demand, the refinery situation is still a threat," said Michael Fitzpatrick, senior energy analyst at Fimat USA. "We haven't been able to replenish our inventories as we used to in the past. That is causing a general tightness in the market."

Exxon Mobil

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shut its Joliet, Ill., refinery and one of

BP's

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Texas City refinery units was shut down for maintenance.

An unexpected decline in gasoline inventories earlier this week injected more uncertainty about refiners ability to produce enough fuels ahead of the winter demand season. Gasoline stocks have fallen below the seasonal average, the Energy Department said.

Climbing natural gas prices also lent support to oil prices Thursday. The Energy Department said natural gas in underground storage increased by 37 billion cubic feet, while analysts expected a rise of 47 million to 51 billion cubic feet.

The normal rate of gas storage has declined due to exceptionally hot weather and an active hurricane season, Fitzpatrick said. The hot weather demanded more gas deliveries, reducing delivery to storage. Recent storms also curbed gas supplies from Gulf of Mexico operations.

Meanwhile,

Total S.A.

(TOT) - Get Report

has shut down its onshore Obagi oil field in Nigeria due to political tensions in the area. The oilfield produces 35,000 barrels of oil equivalent a day and 212 million cubic feet of natural gas a day, the

AP

reported.

Chesapeake Energy

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, the natural gas and oil producer, said it earned $179 million, or 50 cents a share, in the second quarter, compared with $85.5 million, or 33 cents a share, a year ago. Profit was driven by a 30% increase in daily natural gas production due to aggressive property acquisition and by higher price realization.

Earnings beat analysts' average earnings estimate of 46 cents a share, according to Thomson Financial.

Chesapeake said its second quarter production averaged 1.24 billion cubic feet of natural gas equivalent, compared with the 951 million cubic feet a day it produced a year ago. Thirty-seven percent of the increase in production came from organic growth and 63% from acquisitions.

Shares of Chesapeake earlier rose 53 cents, or 1.9%, to $28.83.

In the oil services sector today,

National Oilwell Varco

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earned $61.2 million, or 35 cents a share, in its second quarter. Adjusted for charges related to its merger with Varco International, income was 49 cents a share, ahead of the consensus earnings estimate of 46 cents a share. In the second quarter of 2004, the company earned $21.4 million, or 25 cents a share.

"We are enjoying tremendous demand for our oilfield products and services. The sharp increase in our backlog points to improving results from our Rig Technology group in the coming quarters, and our service, spare parts, and consumables businesses are all performing very well in a rapidly growing market," the company said in a statement.

The company's backlog for its rig technology products rose 40% to $1.2 billion in the quarter.

Despite rising oil and gasoline prices, the major energy indices dropped Friday. The Philadelphia Oil Service Sector Index fell 1% with the biggest decliners being

GlobalSantaFe

(GSF)

and

Baker Hughes

(BHI)

.

The Amex Oil Index also slid 0.5% led by declines at

Marathon Oil

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and

Occidental Petroleum

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.

Shares of

Frontier Oil

(FTO)

rose 4.5% Friday after the refiner was reportedly raised to a buy from hold by analyst Jay Saunders at Deutsche Bank.