17 November 2011 12:50 [Source: ICIS news]
SINGAPORE (ICIS)--Brent crude futures fell by more than $2/bbl on Thursday amid concerns over eurozone debt, but the price spread between WTI and Brent narrowed, with the US benchmark buoyed by a plan to reverse the oil flow of a pipeline from the US midwest to the Gulf coast region.
At 12:05 GMT, January Brent crude on London’s ICE futures exchange was trading at $109.50/bbl, down by $2.38/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $109.35/bbl, down by $2.53/bbl from Wednesday's close.
December NYMEX light sweet crude futures (WTI) were at $101.03/bbl, down by $1.56/bbl from the previous close. Earlier, the US benchmark fell to a session low of $100.84/bbl, down by $1.75/bbl.
Concerns over the eurozone rose on Thursday amid tensions between France and Germany over the role of the European Central Bank (ECB) in countering the eurozone debt crisis.
France has urged the ECB to take on a more active role. Analysts have suggested the ECB should buy large volumes of European bonds in a move similar to the quantitative-easing programmes implemented by the US and UK. However, Germany insists that European regulations prevent such measures.
Meanwhile, borrowing costs for Spain rose to a 14-year high, with average yields on government 10-year bonds rising to 6.975% – the highest level since 1997. Funding bond yields above 7% have been viewed as unsustainable for most nations and have led to other eurozone countries seeking bailouts. Yields on Italian 10-year bonds climbed above 7% last week.
The spread between WTI and Brent narrowed further on Thursday, falling below $9/bbl and retreating to levels seen prior to the start of the Libyan conflict in February.
January NYMEX WTI crude futures had closed $3.22/bbl higher on Wednesday than the previous day. This followed an announcement from Enbridge and Enterprise Products Partners that they plan to reverse the flow of the Seaway Pipeline system, which presently carries foreign imported crude oil from the Gulf coast to the Cushing terminal in Oklahoma.
The move would allow the flow of crude away from Cushing to undersupplied markets, where oil trades at a premium, while alleviating the oversupply at the landlocked Oklahoma terminal for WTI. The service could start by the second quarter of 2012 and peak in 2013.
Additional reporting by Ignacio Sotolongo
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections