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Brent oil up on intense Libyan fighting
NEW YORK—Brent oil prices rose yesterday on intensified fighting in Libya and US prices fell after data showed crude inventories rose more than expected last week, widening Brent's premium against US crude. Brent crude for April delivery gained $2.54 to US$115.60 a barrel having earlier hit US$116.18.
US April crude fell 33 cents to US$104.69 a barrel, after hitting an early high of US$105.92. The premium of Brent crude over US benchmark West Texas Intermediate crude ballooned more than US$2 to above US$11 a barrel, after dipping below US$7 on Tuesday.
Muammar Gaddafi’s forces struck an oil pipeline leading to the Es Sider town and dropped bombs on storage tanks in the Ras Lanuf oil terminal area in the eastern section of Libya that is rebel-controlled.
But Libyan state television blamed the explosions on “al Qaeda-backed” armed elements. Gaddafi’s forces were closing in on the rebel-held main square of Zawiyah, where fighting has led to the closure of one of Libya’s biggest refineries.
Higher US stockpiles
US crude prices weakened after data from the US Energy Information Administration showed crude inventories rose 2.51 million barrels last week, dwarfing the forecast for an increase of just 400,000 barrels in a Reuters poll. More telling for US crude, crude stocks at the key delivery hub in Cushing, Oklahoma, soared 1.69 million barrels to a record 40.26 million barrels. But losses for US crude were limited as the weekly data showed drawdowns for gasoline and distillate inventories were bigger than expected, reflecting improving demand.
Perception of prolonged trouble in Libya was driving the rally in oil prices, said Christopher Bellew, an oil trader at Bache Commodities in London. About 1 million barrels per day of Libya’s output have been shut by the raging conflict. Libya, a member of the Organisation of the Petroleum Exporting Countries, has a normal production of 1.6 million bpd. (Reuters)
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