Brent falls as Nov contract expires, U.S. crude higher

Tue Oct 16, 2012 5:35pm EDT
 
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By Robert Gibbons

NEW YORK (Reuters) - Brent crude prices fell on Tuesday as the front-month November contract expired ahead of weekly inventory reports expected to show U.S. crude oil inventories rose last week.

Expiring November Brent retreated only after reaching a four-week high above $116 a barrel and after Brent's premium to U.S. crude advanced to $24.28, the highest since October 2011.

U.S. crude seesawed most of the day, but managed a higher settlement, receiving support from a rally on Wall Street and from a weaker dollar. .N

Brent and U.S. crude received a boost early when the euro reached a one-week peak against the U.S. dollar on speculation Spain may seek a bailout and end the uncertainty about its intentions. <USD/>

A German ZEW index of investor sentiment rose for a second straight month in October, news that was also seen as giving support to the euro and crude futures.

But rising U.S. crude oil stockpiles and concerns about economic growth in Europe and China kept curbing bullish sentiment.

"Crude got a temporary boost on the expectations that Spain will ask for a bailout, and end the uncertainty, but the consensus is that inventory numbers are going to be bearish," said Phil Flynn, analyst at Price Futures Group in Chicago.

Expiring Brent November crude fell 73 cents to go off the board at $115.07 a barrel. It reached $116.20, the highest for Brent since prices hit $117.02 on September 17.   Continued...

 
A worker holds up a fuel pump nozzle after filling up the tank of a car at a petrol station in Cairo October 3, 2012. REUTERS/Mohamed Abd El Ghany