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 Striking workers shut a fourth Total refinery on Thursday, which
will keep offline 700,000 barrels per day (bpd) of capacity,
boosting Europe's need for foreign imports of distillates.
Light Louisiana Sweet crude <LLS-> differentials hit a seven-month
high of $10 over U.S. crude, or West Texas Intermediate (WTI). U.S.
gasoline futures rose 1.6 percent.
Gulf Coast refiners have been running high volumes of crude to make
distillates for a booming export market. Wednesday's U.S. oil
inventory report showed a large and unexpected fall in distillates
stocks. U.S. demand for petroleum products rose to the highest level
for November in six years while exports increased to the largest
volumes on record for this month of the year, data from the American
Petroleum Institute showed on Thursday.
"Given the surge back towards $100 [per barrel of U.S. crude] and
the strong gasoline demand we're seeing, these refinery issues are
even more supportive than they otherwise would be," said John
Kilduff, a partner at Again Capital LLC in New York.
The sharp move in crude oil futures came amid thin volume.
The market breached a key technical level late in the trading
session, triggering stop losses and forcing traders to scurry and
buy back contracts ahead of rising prices, brokers said.
U.S. crude for January delivery broke through the 200-day moving
average of $98.78 for the first time in a week, sailing past $98.75,
a level at which many traders held positions.
The contract extended gains by more than $1 as traders covered short
positions, trading as high as $99.17 before expiring at $98.77, up
97 cents on the day. U.S. crude for February delivery settled up 98
cents at $99.04.
U.S. RBOB gasoline futures ended 1.6 percent higher at $2.7401 per
gallon, its highest settlement price in one month.
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Brent crude settled up 66 cents at $110.29.
U.S. crude oil's rise narrowed its discount to Brent. The spread
between the two benchmarks <CL-LCO1=R> widened to a high of $12.16
earlier in the session, before traders pushed it in by more than a
$1 in intraday trade to a low of $10.73. It settled at $11.25, in
from Wednesday's close of $11.57.
Data showing a rise in U.S. initial weekly jobless claims to the
highest level in nearly nine months briefly moved the oil market
lower in early trade before it resumed its gains.
Traders and investors also remained focused on supply fundamentals,
including Libyan production outages and unrest in South Sudan.
Libyan exports have fallen to 110,000 barrels per day (bpd) from
more than 1 million bpd in July, and the country has had to step up
fuel imports.
In South Sudan, about 200 oil workers have sought refuge at a United
Nations base and are expected to be evacuated after five days of
conflict. A senior official said at least 16 people had been killed
in clashes since late Wednesday.
(Additional reporting by Robert Gibbons
and Jeanine Prezioso in New York, Claire Milhench in London, Manash
Goswami in Singapore; editing by William Hardy, Keiron Henderson,
Bob Burgdorfer and Meredith Mazzilli)
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