NEW YORK: Crude oil prices were slightly higher in lacklustre trading yesterday, gains kept in check by a stronger US dollar and less chance of reduced US imports from Canada as part of a Canadian pipeline came back online.
The market kept trading sideways after a sharp selloff last week on news that the US Federal Reserve said it would wind down its monetary stimulus program.
“That was a one-time gut check in reaction to the Fed,” said Sarah Emerson, managing principal of energy research and forecasting firm ESAI Energy in Wakefield, Massachusetts. “Okay so we’ve shed $5, now do we see a reason to recoup that? It’s a soft market, it’s not a market that’s getting a lot of information.”
Canada’s Enbridge Inc returned a major section of the Athabasca oil pipeline to service, after a spill on a smaller line disrupted the flow of oil sands crude and forced Suncor Energy to shut output in Alberta.
The spectre of lower imports from Canada into the United States sharply narrowed the premium of global benchmark Brent crude oil to US benchmark West Texas Intermediate.
The spread had widened by mid-morning and was last trading at $6.16. During the session, it hit $5.60, within two cents of its narrowest point reached in November 2011 at $5.58. In January 2011, the spread was as narrow as $5.18.
US crude oil futures were up 40 cents at $95.58 per barrel at 11.30am EDT (1530 GMT), off the session high of $96.17 and down more than $4 from a $99.01 high made last Wednesday.
Front-month Brent crude oil was trading 66 cents higher at $101.82, off its three-week low hit on Monday.
Brent has dropped more than $5 from its high near $107 last week, and remained below the 15- and 50-day moving averages on a continuation chart.