Oil Rises Nearly $2 To 2014 High On Spread Trade


NEW YORK, Jan 28 (Reuters) - U.S. oil rose nearly $2 on Tuesday, settling at its highest price this year and narrowing its discount to European Brent, as traders expected data to show supplies were draining from the contract's benchmark delivery point.

Market perception that the gradual startup of TransCanada Corp's Keystone pipeline would move supplies from oil hub Cushing, Oklahoma, where the U.S. crude oil contract is priced, to the Gulf Coast supported prices.

A lack of pipelines in the region has kept U.S. prices depressed relative to Brent oil for the past three years.

"The Brent/WTI spread is contracting a bit more, and that always helps crude prices," said Tariq Zahir, managing member of commodity trading advisor Tyche Capital Advisors in New York. "The market is expecting a little bit more of a draw at Cushing since that pipeline has opened up. It's a volatile trade."

Brent oil also rose, but not as high, reversing losses on Monday spurred by concerns over emerging markets and the perception of a slowing economy in China.

Brent crude touched a high of $107.79 a barrel, up $1.10, and then settled up 72 cents at $107.41 a barrel. On Monday, Brent fell $1.19, its biggest loss since Jan. 2.

U.S. light crude oil touched a high of $97.66, up $1.94, and settled $1.69 higher at $97.41, its highest settlement since Dec. 31.


View Full Article

Copyright 2016 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
United States Houston: Account Rep, Bus Dev, Sr
Expertise: Business Development|Sales
Location: Houston, TX
Business Development Manager
Expertise: Business Development|Construction Manager|Sales
Location: Tempe, AZ
Manager, Operations Excellence
Expertise: Executive
Location: Houston, TX
search for more jobs

Brent Crude Oil : $49.98/BBL 1.59%
Light Crude Oil : $49.18/BBL 1.56%
Natural Gas : $2.73/MMBtu 1.44%
Updated in last 24 hours