Oil ends mixed, extend gains post-settlement on U.S. draw report

Tue Sep 20, 2016 5:53pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - U.S. crude oil settled up on Tuesday on speculation of demand from the planned restart of the country's main gasoline pipeline, before being joined by Brent in a post-settlement rally on data showing a surprise U.S. inventory drawdown.

The American Petroleum Institute (API), a trade group, said U.S. crude inventories fell by 7.5 million barrels for the week ended Sept. 16, drawing unexpectedly for a third week in a row. Analysts polled by Reuters had expected a build of 3.4 million barrels. The U.S. Energy Information Administration (EIA) will report official inventory data on Wednesday.[API/S] [EIA/S]

Both U.S. crude and Brent hit six-week lows earlier on the day in volatile trade ahead of the Sept. 26-28 informal talks in Algeria between the Organization of the Petroleum Exporting Countries and other producers on a proposed deal to contain a glut that has weighed on prices for about two years.

Brent futures for November delivery LCOX6 settled down 7 cents at $45.88 per barrel.

U.S. West Texas Intermediate (WTI) crude for October delivery Clc1 closed up 14 cents at $43.44.

WTI settled up on anticipated demand for U.S. crude after Colonial Pipeline Co [COLPI.UL] said it would restart its main gasoline line by Wednesday. Supplies of gasoline from the Gulf Coast to the East Coast have been disrupted since a leak was discovered on the 1.3 million barrel per day line on Sept. 9.

While WTI rose, U.S. gasoline futures RBc1 fell 4 percent to $1.3646 a gallon on worries that a gasoline glut would return with the full restart of the Colonial line.

In post settlement trading, U.S. crude futures continued their climb, reacting to the API data. WTI's November contract CLV6, the market's new spot month from Wednesday after the October contract expired at Tuesday's settlement, rose 73 cents.   Continued...

 
An oil pump is seen in Lake Maracaibo, in Cabimas, Venezuela, August 13, 2016. REUTERS/Jesus Contreras