Brent up after 3-day slide, U.S. October crude nears expiry

Thu Sep 20, 2012 1:47pm EDT
 
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By Robert Gibbons

NEW YORK (Reuters) - Brent crude prices rose on Thursday, recovering from a six-week low and halting a three-day slide of more than 7 percent, while U.S. crude seesawed in choppy trading as the front-month October contract approached expiration.

Lending support to the oil futures complex, U.S. gasoline futures rallied 2 percent, supported by a fire at Venezuela's El Palito refinery and a decline in the U.S. gasoline inventory, reported by the government on Wednesday.

Heating oil futures gained more than 1 percent.

The Venezuelan fire followed last month's blaze at the OPEC member's Amuay refinery. The U.S. Energy Information Administration (EIA) said domestic gasoline stocks fell 1.41 million barrels last week.

Brent's drop to $107.10 a barrel early on Thursday, the lowest price since August 3, pegged the retreat from last Friday's settlement at more than $10.

"We do regard the scale and above all the speed of the price slide as excessive," a Commerzbank research note said. "We expect to see a counter-movement in the next few days."

Brent's premium to U.S. crude tested below $16 a barrel and found support above the $15.50 level a fourth straight day, then bounced back above $17. Wednesday's $15.57 low was the narrowest spread since July 25, according to Reuters data.

Brent November crude rose $1.50 to $109.69 a barrel by 1:21 p.m. EDT (1721 GMT), having reached $109.84.   Continued...

 
A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. South Korea, as a member of the 28-nation IEA, will release 3.46 million barrels oil stocks over 30 days after a meeting with local refiners later on Monday. REUTERS/Jo Yong-Hak