Brent up slightly, U.S. down 2 percent; pipeline news limits losses
By Barani Krishnan
NEW YORK (Reuters) - Brent settled up while U.S. crude finished down 2 percent but off its lows after a partial pipeline outage and bets of positive U.S. inventory data helped oil offset some of Tuesday's skittish sentiment caused by weak Wall Street stocks.
Traders also took in their stride early market jitters from the impending expiry of the front-month contract in U.S. crude and a near two-week high in the dollar. [USD/]
Brent futures fell more than 2 percent earlier on Tuesday and U.S. crude tumbled over 3 percent as U.S. equity markets slumped to a two-week low. Gasoline futures also lost more than 3 percent before turning positive.
The rebound came after news that Colonial Pipeline had shut part of its operation, including a line with a 850,000-barrels capacity to carry both gasoline and distillates from North Carolina to its New Jersey hub. Colonial said the shutdown was to investigate "odors of gasoline."
"Products futures were up on the Colonial Pipeline news and Brent crude responded and turned higher probably because the Colonial news might mean more product needed from Europe," said Phil Flynn, analyst at Price Futures Group in Chicago.
Brent's front-month contract, November, settled up 16 cents, or 0.3 percent, at $49.08 a barrel.
U.S. crude's October contract settled down 85 cents, or 1.8 percent, at $45.83 before expiring as the front month. The nearby November contract, settled down 60 cents at $46.46.
Losses in U.S. crude were also limited though by a Reuters survey showing U.S. crude inventories had fallen almost a million barrels last week, following through with the previous week's decline of 2.1 million barrels. [EIA/S] Continued...