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.
Traders said a U.S. executive order against OPEC member Venezuela and sanctions against certain individuals in that country also had a negative effect on Brent, although a senior Obama administration official said the order does not target the Venezuelan oil industry.
U.S. crude imports from Venezuela have averaged 728,000 barrels per day since the start of last year, down from 738,000 bpd in 2013 and 890,000 bpd in 2012.
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| An oil well is seen near Denver, Colorado February 2, 2015. |
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.
Traders said a U.S. executive order against OPEC member Venezuela and sanctions against certain individuals in that country also had a negative effect on Brent, although a senior Obama administration official said the order does not target the Venezuelan oil industry.
U.S. crude imports from Venezuela have averaged 728,000 barrels per day since the start of last year, down from 738,000 bpd in 2013 and 890,000 bpd in 2012.
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