Related Keywords: Energy
--U.S. oil rises along with stock market, while Europe's Brent falls
--Seaway pipeline reversal offers end to wide price gap
--WTI recently up $1.64 at $104.58/bbl
By Jerry A. DiColo Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--U.S. crude futures rose Tuesday along with equities while Europe's Brent crude fell, as investors looked to a coming pipeline reversal that is expected to bring U.S. oil in line with the rest of the globe.
Light, sweet West Texas Intermediate crude for May delivery recently traded $1.64, or 1.6%, higher at $104.58 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange for June delivery traded 14 cents lower at $118.54 a barrel.
The gap between U.S.-traded WTI and Brent fell below $14 for the first time in more than two months after rising above $20 in early April.
The Seaway pipeline reversal, designed to help ease a supply glut in Cushing, Okla., that has been depressing U.S. prices, will begin delivering crude to the Gulf Coast earlier than expected.
Traders are scrambling to reverse long-held bets that Brent crude would remain at a premium to its U.S. counterpart, said Tony Rosado, a broker at GA Global Markets.
"They are selling Brent, they are buying TI. It's all solely because of Seaway," Rosado said.
The reversal had been expected to start by June 1, but on Friday, Enterprise Products Partners LP (EPD), which controls the Seaway project, said in a regulatory filing that the pipe would reverse the flow on or around May 17.
Surging production in Canada and North Dakota has created a glut of oil in the middle of the U.S. The oil industry has been clamoring for a pipeline that could ease the transportation bottleneck and move oil from landlocked storage in Oklahoma to the refining corridor in Texas and Louisiana.
Seaway will move as much as 150,000 barrels a day from Oklahoma to the Gulf Coast this year, and will be expanded to 400,000 barrels a day early next year.
Dominick Chirichella, an oil analyst at the Energy Management Institute, said the price spreads in oil are undergoing a major shift this week, and improving data out of the U.S. and Europe is helping keep a floor in the market.
On Tuesday, U.S.-traded crude was helped by a rise in equity markets, with Dow Jones Industrial Average futures up 85 points to 12,935.
Front-month May reformulated gasoline blendstock, or RBOB, recently traded 1.57 cents lower at $3.2513 a gallon. May heating oil recently traded 0.63 cent higher at $3.1229 a gallon.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; firstname.lastname@example.org
(END) Dow Jones Newswires
April 17, 2012 09:28 ET (13:28 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
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