Oil slips towards $109 as stockpiles rise * Brent/U.S. crude spread widens to $12 on U.S. stock build * U.S. crude falls to lowest since July 1 * API reports rise in U.S. crude stocks, Chinas up in Sept * Coming up: EIA oil inventory report, Brent crude slipped towards $109 a barrel on Wednesday, pressured by rising inventories in China and expectations of a further buildup in the United States, the worlds top consumer. Maintenance at U.S. refineries and pipeline outages has led to an increase in domestic stocks, stretching Brents premium to the U.S. benchmark also known as WTI to $12 a barrel, its widest since April. Brent crude slipped 71 cents to $109.26 a barrel by 0846 GMT, after hitting a session high of $110.06. U.S. crude fell 83 cents to $97.47 and earlier reached $97.40, its lowest since July 1. WTI prices are largely dictated by the amount of supply in the U.S. at the moment, which is why WTI really underperformed Brent overnight, said Ben Le Brun, a market analyst at OptionsXpress in Sydney. A series of reports showing rising crude stocks has pressured prices. On Monday, the U.S. government said they rose by 4 million barrels in the week to Oct. 11 and increased at the Cushing storage hub for the first time since the end of June. Analysts expect the U.S. Energy Information Administration - returning to its normal schedule after the government shutdown - to report a further, 2.9-million-barrel increase in crude stocks for the latest week later on Wednesday. Ahead of the EIA report at 1430 GMT, oil industry group the American Petroleum Institute said on Tuesday that U.S. crude stocks rose further last week by 3 million barrels. Stockpiles also built in China, the second-largest oil consumer, in September, official news agency Xinhua said on Wednesday, as crude imports jumped to a record high. Rising output of shale oil added to the picture of an amply supplied U.S. market. The Eagle Ford formation in Texas has beaten North Dakotas Bakken to the milestone of 1 million barrels per day, the EIA said. Supply outages in Libya and tenuous relations between the United States and Saudi Arabia, the most important oil producer in the Middle East, limited the price decline for Brent.
Posted on: Wed, 23 Oct 2013 09:35:12 +0000
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