Brent Rises, US Oil Recoups Losses after Pipeline Resumes
NEW YORK, Oct 7 (Reuters) - Crude oil futures on both sides of the Atlantic pared losses on Monday after a sharp drop in earlier trade, following a report that a key pipeline delivering crude oil from Cushing, Oklahoma, had resumed shipping after an earlier outage.
Operations of the Seaway oil pipeline, through which crude oil flows from Cushing to Gulf Coast refineries, resumed after a brief shutdown, industry intelligence firm Genscape reported early on Monday. Cushing is the delivery point for the U.S. oil futures contract.
"There were a lot of concerns that the Gulf Coast was really in trouble" if Cushing's oil was unavailable, and with production curtailed in the Gulf of Mexico because of a tropical storm, said Phil Flynn, energy analyst at Price Futures Group in Chicago, Illinois.
Once Seaway was reported to be back online, Flynn said, the market was "pricing in relief" as WTI cut its losses.
U.S. crude oil slipped 81 cents to settle at $103.03 a barrel, after trading close to $2 a barrel lower at $101.86 earlier in the session. The contract slipped below the 100-day moving average of $102.45.
Brent crude futures reversed earlier losses to finish up 22 cents at $109.68 per barrel, after earlier trading as low as $107.89.
Brent's premium to U.S. crude widened to $6.65, a move of over $1 from Friday's close of $5.62 and its highest premium at settlement since early September.
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