Brent rise boosts premium to slumping U.S. crude
By Robert Gibbons
NEW YORK (Reuters) - Brent oil edged higher on Tuesday, snapping three days of declines and lifting its premium to slumping U.S. crude back above $18 a barrel, as supportive German economic growth helped counter political turmoil in Greece.
Anticipation that inventory reports would show U.S. crude stocks rose an eighth straight time last week, adding to record stockpiles at Cushing, Oklahoma, helped pressure U.S. crude and increase its price deficit to Brent, brokers and traders said.
Industry data from the American Petroleum Institute (API), released after crude futures had settled, did show U.S. crude stocks rose 6.6 million barrels in the week to May 11, a much bigger rise than expected by analysts. <API/S>
Crude stocks at Cushing, delivery point for the U.S. light sweet crude contract also rose, by 2.8 million barrels.
The approach of the June Brent contract's expiration on Wednesday also helped boost the premium to U.S. June crude to $18.26 a barrel based on settlements.
Brent's premium to U.S. crude pushed above $18 for the first time since April 16, when news of this week's planned reversal of the Seaway crude pipeline broke.
The pipeline will allow stockpiles bottlenecked in the U.S. Midwest to be sent to the refinery-rich Gulf Coast. However, the initial capacity after the reversal will be only 150,000 barrels per day, insufficient in the short term to drain much of the Midwest glut, traders said.
Brent June crude rose 67 cents to settle at $112.24 a barrel, recovering from a $110.93 low and reaching $112.67. Continued...