Oil prices rise in choppy trading as US inventory drops

August 21, 2014 - 12:00:00 am

 

NEW YORK: US crude oil rose in choppy trading yesterday ahead of the September contract’s expiration and after government data showed crude stocks in the United States fell sharply last week.

Front-month October Brent and US October crude saw more modest gains, with Brent up a day after falling to a 14-month low.

US crude stocks slid by 4.5 million barrels last week, the US Energy Information Administration (EIA) said, more than analysts had expected. Stocks in Cushing, Oklahoma — the delivery point for the US crude contract — rose by 1.76 million barrels.

Gasoline stocks rose 585,000 barrels against expectations for a drop while distillate stocks fell 960,000 barrels, slightly more than forecast.

Brent crude for October delivery was up 29 cents at $101.85 a barrel at 12.17pm EDT (1617 GMT). The contract touched $101.07 on Tuesday, its lowest since June 26, 2013.

The expiring US September crude contract was up 63 cents at $95.11 a barrel. More actively-traded October crude rose 23 cents to $93.09, with its discount to Brent above $9 intraday, the widest spread since June.

US crude futures, also known by their West Texas Intermediate benchmark or WTI, have been pressured by growing supplies of light-sweet oil from booming North American output, hitting a seven-month low of $94.26 on Tuesday.

September WTI rose more than $1 a barrel intraday on Wednesday as traders bought back short positions ahead of the contract’s expiration.

September’s premium to the October contract reached $3.12 yesterday, the largest price difference between the front and second month contracts  since 2009.

Reuters

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