Brent rises after Saudi king dies, US crude falls NEW YORK: Brent crude rose on Friday on uncertainty over Saudi oil output following the death of King Abdullah, while US crude prices fell, with traders citing a reported build at the Cushing, Oklahoma storage hub and the partial shutdown of an Indiana refinery. Salman, the late kings brother and successor to the throne, is expected to continue OPECs policy of keeping oil output steady to protect market share. Still, the transition should be bullish for Brent, said Bob Yawger of Mizuho Securities USA. Any time theres uncertainty in the market, you tend to have support, he said. Brent was up 47 cents to trade at $48.99 by 12:50 p.m. EST (1750 GMT). It rose as high as $49.80 after reports of the Saudi kings death. US crude fell 49 cents to trade at $45.83. A trader said energy data provider Genscape estimated that US crude stockpiles in Cushing, Oklahoma, rose 2.7 million barrels in the week ending Tuesday. The spread between WTI and Brent should keep widening, said Walter Zimmerman, chief technical analyst at United-ICAP. Theres substantial downside to that, Zimmerman said. Reports of a partial shutdown at BPs oil refinery in Whiting, Indiana, weighed further onUS crude. Sources familiar with the plants operations said they did not know when the 90,000-barrel-per-day (bpd) crude distillation unit would be restarted. Mizuhos Yawger said the refinery disruption would exacerbate the USs oversupply woes. That story even trumps the death of the king of the biggest oil producing country basically in the world, he said. WTI pared some losses as the National Association of Realtors said US home sales rose in December, which may indicate a recovering housing market.. On Thursday, US government data showed domestic oil inventories are at an 80-year high for this time of the year. Booming US production has turned the United States from the worlds biggest oil importer into one of the top producers, pumping more than 9 million barrels per day. Some oil exporters, such as Venezuela, want the 12-member Organization of the Petroleum Exporting Countries (OPEC) to cut output to support prices and revenues. Yet, led by Saudi Arabia, OPEC announced last November it would keep output steady at 30 million barrels per day. - Reuters
Posted on: Tue, 27 Jan 2015 11:28:14 +0000