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Daily Oil Summary

09 May 2012 21:14:34 | esgm

The front-month June ICE Brent contract opened in positive territory on Wednesday, however with mounting concerns over both economic and political instability in the eurozone, prices took a sharp downturn.

During the early hours, prices moved sideways until Europe opened its doors for business and prices climbed substantially but failed to break-even compared to the previous settlement. The front-month NYMEX WTI contract was less volatile, trading sideways throughout this period.

As Greek politicians remain in a deadlock, and investors are expecting a possible disorderly default on sovereign debts and a swift exit from the euro, both ICE Brent and NYMEX took another dive to touch intra-day lows. Later in the day, two events prevented the contracts to fall further, the first from the US Department of Energy, the Energy Information Administration (EIA) published its weekly stock report, showing an unexpected draw in distillate stocks and a larger-than-expected drop in gasoline inventories for the week ending 4 May helped lift prices. However, the gains were capped by a larger than expected build in crude stocks.

Shortly after this boost, traders turned their heads to the North Sea Nexen-operated Buzzard oil field which was heard to have been shut down for unknown reasons. As traders tried to confirm this news, prices began to climb.

The June Brent contract moved back into positive territory while NYMEX was lagging behind. As Canada woke up for business and the unplanned outage at Buzzard was confirmed by Nexen, both contracts weakened. However, this was short lived and prices began to climb again.

Towards the close, June Brent managed to hang onto the gains even setting a new intra-day high, while June WTI was still in negative territory but was close to breaking even against Tuesday's close.

June Brent closed the day up by 47 cents/bbl at $113.20/bbl.

June West Texas Intermediate (WTI) closed the day down 20 cents/bbl at $96.81/bbl, having traded a range between $95.17/bbl and $97.39/bbl.

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