New York oil hits five-month high above $102

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New York oil prices surged to five-month highs on Wednesday following the sale of a US pipeline that should result in lower crude stockpiles for the United States, traders said.

New York's main contract, light sweet crude for delivery in December, reached $102.29 a barrel -- the highest level since June 9. It later retreated to $101.95, still up $2.58 compared with Tuesday's closing level.

Brent North Sea crude for December slid $1.44 to $110.74 a barrel as traders in London focused on eurozone demand worries.

Canadian company Enbridge on Wednesday bought ConocoPhillips' 50 percent stake in the 330,000 barrel-per-day Seaway pipeline, which runs between the US Gulf of Mexico coast and the Cushing, Oklahoma oil storage hub.

Enterprise Product Partners, which owns the other 50 percent of Seaway, said it would reverse the pipeline to move oil to the Gulf coast refining hub from Cushing starting in mid-2012.

High stockpiles in Cushing have been responsible for the wide gap between New York and Brent crude prices in recent months, according to analysts.

"The full reversal of the Seaway pipeline will likely clear the overhang of crude oil in the US MidWest, and put Brent and WTI at par with each other," said Credit Agricole CIB oil analyst Christophe Barret.

Meanwhile, the US Department of Energy said that American crude stockpiles fell by 1.1 million barrels last week, higher than the 800,000-barrels drop forecast by analysts.


© 2011 AFP

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