Brent Falls on Emerging Markets, U.S. Oil Rises on Cold
NEW YORK, Feb 4 (Reuters) - Brent oil settled at a 3-month low on Tuesday, pressured by the downturn in emerging markets, while U.S. crude ended higher, boosted by continued demand for heating fuels and the expectation of a large draw from storage at the benchmark's delivery point.
U.S. oil rose by as much as $1.28 as traders expected oil inventory data later on Tuesday to show that supplies were beginning to drain in earnest from Cushing, Oklahoma, after the start-up of TransCanada's Keystone south pipeline.
The rise in the front-month U.S. oil contract forced its discount to Brent narrower by $1.02 on Tuesday.
Relieving the supply glut at Cushing would support U.S. prices that have remained depressed for the last three years due to a lack of infrastructure to free the oil.
"The pipeline continues to bring that Brent-WTI spread tighter," said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
U.S. oil also drew gains from frigid weather in the United States, which has significantly boosted demand for U.S. oil as refiners pump out distillates, which include heating fuels.
In the meantime, Brent losses were steepened by worries over emerging markets. Emerging market stocks pared losses but were still down sharply for a second day on Tuesday.
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