|
 Worries over China's growth kept Brent prices flat.
The discount between U.S. crude and the European benchmark shrank
early on Wednesday to its lowest since early October in anticipation
of the data, which showed the fourth consecutive weekly drop in
inventories at the Cushing, Oklahoma delivery hub.
The U.S. Energy Information Administration said crude stocks rose
overall by just 68,000 barrels last week, far less than the average
build of 1.2 million barrels forecast, while stocks at Cushing fell
1.1 million barrels as TransCanada Corp's southern pipeline
continued to drain oil to the Gulf Coast.
"The impact of the Keystone pipelines is on full display now and
it's clearly supportive for prices," said John Kilduff a partner at
Again Capital, LLC in New York.
Also supporting U.S. crude prices, U.S. gasoline inventories fell
2.8 million barrels, nearly three times traders' forecasts, data
showed. Analysts attributed the surprise drop to lower refinery
output and warmer weather coaxing drivers back on the roads.
The data drove RBOB gasoline prices for the front month March
contract nearly 2 cents higher early in the session. But the
contract, which expires Friday, gave back gains to settle flat,
causing U.S. crude oil to pare gains too.
"The reason WTI ran out of steam is that RBOB ran out of steam,"
said Walter Zimmermann, chief technical analyst at United-ICAP in
New Jersey.
U.S. crude oil settled 76 cents higher at $102.59 per barrel. It
briefly touched a high of $102.90 after the EIA data was released.
Brent crude settled up a penny at $109.52 a barrel.
U.S. crude's discount to Brent <CL-LCO1=R> narrowed to as little as
$6.72, the lowest price since Oct. 9, before widening back to settle
at $6.93.
The spread has narrowed in recent weeks as storage has drained from
Cushing, where prices were previously depressed, to refiners on the
Gulf Coast. But analysts worry refiners' demand for U.S. crude could
reach a limit.
[to top of second column] |
"(It's unclear) that the Gulf Coast refineries really have strong
enough demand to continue to pull that oil out of Cushing," said
Gene McGillian, analyst at Tradition Energy in Stamford,
Connecticut. "If the spread drops down below $5, we'll see some of
the strength let up."
Unrest in North African exporter Libya has cut supplies of oil since
the middle of last year. More than 100 rockets fired in clashes
between rival government-paid militia knocked out a power plant in
southern Libya on Tuesday.
Oil markets were also watching the outlook for demand in China. The
world No. 2 oil consumer's corporate debt has hit record levels and
is likely to accelerate a wave of domestic restructuring and trigger
more defaults as credit repayment problems rise.
Demand in the United States is also a major focus after data on
Tuesday showed U.S. home price gains slowed in December,
underscoring a loss of momentum in the housing recovery, while
consumer confidence drifted lower this month.
However, the weakness in the housing sector may have been in part
due to the bitter cold and severe snowstorms.
(Additional reporting by Anna Louie
Sussman in New York, David Sheppard, Peg Mackey and Shadi Bushra in
London, and Manash Goswami in Singapore; Editing by Dale Hudson,
David Evans, Chris Reese and Marguerita Choy)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
