Oil near six-year low; Brent trades at par to U.S. crude
By Barani Krishnan and Samantha Sunne
NEW YORK (Reuters) - Oil tumbled 5 percent to near six-year lows before recovering ground on Tuesday, and Brent briefly traded at par to U.S. crude for the first time in three months as some traders moved to take advantage of ample storage space in the United States.
Traders were searching to store the glut of oil, which has knocked prices down 60 percent in the last six months. So far this week, Brent has lost 7 percent and U.S. crude 5 percent.
Brent LCOc1 settled down 84 cents at $46.59 a barrel, after falling to $45.19, its lowest since March 2009.
U.S. crude CLc1 closed down 18 cents at $45.89, after hitting an April 2009 low of $44.20.
Oil tumbled earlier after big OPEC producer United Arab Emirates defended the group's decision not to cut output to boost prices.
Losses were pared by a flurry of short-covering toward the close, as players moved to cash in on profitable short positions, traders said.
The arbitrage between Brent and U.S. crude traded at parity for the first time since October, with both markets touching $46 a barrel at one point.
Traders said the benchmarks converged as limited storage on land for Brent forced traders to look for storage in the Cushing, Oklahoma, delivery point for U.S. crude. Continued...