Oil above US$97 on expected fall in US supplies
APKUALA LUMPUR--The price of oil surged above US$97 a barrel Wednesday on expectations U.S. crude stockpiles fell.
December 5, 2013, 12:24 am TWN
Benchmark U.S. crude for January delivery was up US$1.16, or 1.2 percent, to US$97.20 a barrel at mid-afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract rose US$2.22 to US$96.04 on Tuesday after TransCanada said the southern leg of its Keystone XL pipeline should be operational early next month.
The pipeline would move oil out of Cushing, Oklahoma, the physical delivery point for futures on U.S. benchmark oil, to Port Arthur, Texas. That should lead to greater demand for the oil, which costs less than the crudes imported into the Gulf region.
Analysts said the U.S. energy department is expected to report Wednesday a fall in crude supplies after 10 consecutive weeks of gains, which might point to stronger demand.
Investors are also looking to a meeting of the Organization of Petroleum Exporting Countries in Vienna on Wednesday for an update on production levels. OPEC is expected to keep intact its daily output target of 30 million barrels a day, although the group may come under pressure to reduce production if some supply sources currently experiencing disruptions return to normal.
Brent crude, a benchmark for international oils, rose 24 cents at US$112.86 a barrel on the ICE exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline gained 2 cents to US$2.744 a gallon.
— Heating oil was up 0.7 cent at US$3.073 a gallon.
— Natural gas added 1.3 cents to US$3.989 per 1,000 cubic feet.