Brent up on Norway supply woes, some policy easing

Thu Jul 5, 2012 4:17pm EDT
 
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By Gene Ramos

NEW YORK (Reuters) - Brent crude oil futures rose on Thursday, ending at a five-week high on worries about tighter supplies following a lockout of striking oil workers in Norway and hopes that some policy-easing steps by some central banks would improve oil demand.

China made a surprise move to cut interest rates to bolster slowing economic growth in the No. 2 oil consumer, and the Bank of England undertook another round of monetary stimulus.

Brent hit a session high above $102 a barrel. Then the European Central Bank cut its main interest rate to 0.75 percent and the euro slid against the dollar, pulling Brent off that high.

The U.S. government reported that crude oil inventories fell more sharply than expected last week, initially helping extend Brent's gains and pare losses for U.S. crude. But analysts said the decline was not enough to push prices much higher, with U.S. crude supply remaining more than 24 million barrels above last year's level. <EIA/S>

Norway's oil companies, including Statoil (STL.OL: Quote), called a lockout in a bid to end a strike by offshore oil and gas workers by possibly inducing government intervention.

Norway's labor ministry declined to say whether it would intervene but said a lockout was legal.

In London, August Brent crude closed at $100.70 a barrel, gaining 93 cents, the highest settlement for front-month Brent since the May 31's finish at $100.87.

"You are getting a very strong 'sell the fact' move off these global rate moves this morning," said Mike Guido, managing director of hedge fund sales and energy markets at Macquarie in New York.   Continued...

 
An employee holds a gas pump at a gas station of Hyundai Oilbank in Seoul June 15, 2012. REUTERS/Choi Dae-woong