The rise in U.S. oil narrowed its discount to Brent by more than $1
from Monday's settlement.
Traders bought contracts to square futures and options positions
ahead of the U.S. February oil contract's expiry on Jan. 21. There
will be no floor trading on the New York Mercantile Exchange and no
settlement will occur on Monday, Jan. 20, due to the Martin Luther
King Jr. holiday.
"People will get out of the contract by Thursday or Friday," said
Bill Baruch, senior market strategist at iitrader.com in Chicago.
Upbeat retail sales data helped support U.S. oil futures.
The February Brent crude contract, which expires on Thursday,
settled down 36 cents at $106.39, after seesawing in a range of more
than a dollar, reaching an early morning high of $107.14.
U.S. crude settled up 79 cents at $92.59, a day after dropping 92
"This is a consolidation move, the market is trying to hold after
its slide," said Gene McGillian, energy analyst with Tradition
Energy in Stamford, Connecticut.
Brent's premium to U.S. oil <CL-LCO1=R> narrowed from a high of
$15.51 on Monday. The spread breached the 10-day moving average of
$13.75, but settled slightly wider at $13.80.
Oil prices were little changed after data from the American
Petroleum Institute showed that weekly crude stocks fell by 4.1
million barrels with a nominal build at the benchmark delivery point
in Cushing, Oklahoma. Gasoline stocks rose by 5.4 million barrels
and distillates fell by 1.7 million barrels, the API data showed.
Analysts in a Reuters poll expected a decrease in oil stocks for the
seventh straight week, by an average of 600,000 barrels, while
stockpiles of distillate and gasoline were expected to have
dramatically increased for a second week in a row.
The U.S. Energy Information Administration is expected to release
its data at 10:30 a.m EST (1530 GMT) on Wednesday.
[to top of second column]
IRAN, LIBYA WEIGH
Major powers and Iran have moved a step closer to resolving a long
standoff over Tehran's nuclear ambitions after endorsing a deal that
will come into force on Jan. 20.
The parties are likely to start talks on a final settlement in
February, a diplomatic source said on Monday.
A resolution of the issue could lead to the lifting of Western
sanctions on the OPEC producer's oil exports, increasing global
Libya's production has also risen to at least 600,000 barrels per
day (bpd), with output at the El Sharara field back up to more than
300,000 bpd, its oil minister said earlier in the week. Wrecked by
months of domestic protests, the OPEC producer's output is still
below the 1.2 million bpd it was turning out in July.
Britain's biggest oilfield, Buzzard, where an outage last week
temporarily boosted Brent, is expected to return to normal output in
coming days, its operator Nexen said on Monday.
(Additional reporting by Jeanine
Prezioso in New York, Peg Mackey in London and Florence Tan in
Singapore; editing by David Evans, Keiron Henderson, David Gregorio,
Meredith Mazzilli and Chizu Nomiyama)
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