Brent falls while U.S. crude gains on easing stockbuild

Mon Mar 9, 2015 4:03pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Brent prices fell 2 percent on Monday pressured by European Central Bank bond-buying, while U.S. crude rose about 1 percent on a smaller-than-expected build in inventories at the key Cushing oil hub, leading to a narrowing gap between the two benchmarks.

Brent's premium to U.S. crude CL-LCO1=R, one of the biggest oil plays, narrowed to less than $9 a barrel, tripping up some traders who had bet the spread would expand this week after a recent 13-month high above $13.

Brent was pressured as the ECB started buying bonds under its quantitative easing program, a move that implies a certain level of deflation, said Bob Yawger at Mizuho Securities in New York.

U.S. crude was lifted after data from energy information provider Genscape suggested a smaller inventory build last week, compared with the previous week, at Cushing, Oklahoma, the delivery point for U.S. futures.

Genscape estimated a 157,000-barrel rise in Cushing last week, traders said, versus 536,000 barrels noted by the Energy Information Administration during the week ended Feb. 27.

"The perception is that the number will be smaller than it has been in the last week, and several weeks before that, particularly the number at Cushing won't be one of these mega-builds," Yawger said.

Brent LCOc1 settled down $1.20, or 2 percent, at $58.53 a barrel.

U.S. crude CLc1 finished up 39 cents, or 0.8 percent, at $50.   Continued...

An oil well is seen near Denver, Colorado February 2, 2015.   REUTERS/Rick Wilking