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NYMEX-U.S. crude up after Seaway pipeline pumps oil from Midwest
January 14, 2013 / 1:02 AM / 5 years ago

NYMEX-U.S. crude up after Seaway pipeline pumps oil from Midwest

SEOUL, Jan 14 (Reuters) - U.S. crude futures rose to almost $94 a barrel on Monday, leaving less than a $17-a-barrel gap from London-traded Brent crude, after the start-up of the expanded Seaway Pipeline late last week, a major project that could ease distortions in global oil markets.

FUNDAMENTALS

* U.S. February crude gained 30 cents to $93.86 a barrel as of 0011 GMT after settling down 26 cents at $93.56 a barrel in the previous session.

* Brent February crude unchanged at $110.64 a barrel after settling down $1.25 previously.

* The Seaway oil pipeline, newly expanded to carry up to 400,000 barrels per day (bpd), began pumping crude on Friday from an over-supplied U.S. Midwest region to the Gulf Coast, which many traders have been betting will support benchmark U.S. oil prices after being depressed at the landlocked U.S. futures delivery hub of Cushing, Oklahoma.

* On the news of Seaway’s pipeline operation, the price spread between U.S. crude futures, or West Texas Intermediate delivered at Cushing, and London-traded Brent crude futures narrowed to less than $17 a barrel on Friday for the first time since September. CL-LCO1=R

* Hedge funds and other large speculators raised their bets on rising U.S. crude oil prices by more than 10 percent in the week to Jan. 8, data from the U.S. regulator showed on Friday, as traders positioned themselves before the start-up of the expanded Seaway crude oil pipeline.

* Oil market was also supported by the news that bad weather cut oil exports from Iraq’s Basra ports to 960,000 bpd on Sunday from 2.35 million bpd a day earlier, a shipping source said.

* The oil price rally, however, was limited by the fact that large volumes of European gasoline headed to the New York Harbor, delivery point for U.S. oil product futures, as fuel demand in West Africa declined seasonally.

* In the oil producing Middle East and African region, geopolitical risks have intensified as French fighter jets pounded Islamist rebel strongholds deep in northern Mali on Sunday. Paris poured more troops into the capital Bamako, awaiting a West African force to dislodge al Qaeda-linked insurgents from the country’s north.

* In Syria, government forces killed at least 36 people, 14 of them children, in a bombardment of rebel-held areas on the outskirts of Damascus on Sunday, Syrian opposition activists said.

* Iran is working with southern secessionists in Yemen to expand its influence and destabilise the strategic region around the Straits of Hormuz, the U.S. envoy to Yemen was quoted as saying on Sunday.

MARKETS NEWS

* U.S. stocks ended little changed on Friday as investors took a step back from buying ahead of this week’s busy corporate earnings calendar. The Dow Jones industrial average gained 17.21 points, or 0.13 percent, to 13,488.43. The Standard & Poor’s 500 Index dipped 0.07 points to 1,472.05.

* The yen plumbed a 2-1/2-year low against the dollar on Monday as Japan’s central bank faced relentless political pressure to deliver bold stimulus, while Asian stocks got off to subdued start with Tokyo closed for a public holiday.

DATA/EVENTS

* The following data is expected on Monday (GMT):

0900 Italy Industrial output Nov

1000 Euro zone Industrial production Nov

2100 Federal Reserve Chairman Ben Bernanke speaks (Reporting by Meeyoung Cho; Editing by Muralikumar Anantharaman)

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