NEW YORK (Nov 16):'' U.S. oil closed at five-month highs above $100 on Wednesday, sharply narrowing its discount to London's Brent crude, the more common world oil benchmark now, and bucking a lower trend in other commodities.
Pipeline initiatives announced on Wednesday to unclog a year-long bottleneck in the transportation of crude in America's Midwest helped U.S. oil prices to surge on expectations of a swift collapse in inventories. Brent prices, on the other hand, closed down, narrowing the gap between the two oil prices to the smallest since March.
Copper, gold, soybeans and coffee fell on weaker fundamental outlooks and the dollar's rise to a five-week high against the euro as rising French and Italian borrowing costs heightened worries about the euro zone.
The 19-commodity Reuters-Jefferies CRB index rose by just half a percent as the 3 percent surge in U.S. crude - its main component - was offset by losses in the broader market.
U.S. crude for January delivery closed at $102.60, rising $3.17, which sent the transatlantic arbitrage to Brent tumbling to below $10 from record highs above $28 in October.
The December contract for U.S. crude, which expires on Friday, settled at $102.59, up $3.22, after jumping to a session high $102.89, the loftiest intraday price since June 1.
Prices last settled above $100 on June 9. Brent settled at $111.88 a barrel, falling 30 cents. U.S. prices shot higher after Canada's Enbridge and Enterprise Products Partners on Wednesday announced a plan to reverse the flow of an Oklahoma-to-Texas pipeline to send crude locked up at the Cushing, Oklahoma oil hub to the Texas coast. Earlier, ConocoPhillips said it had sold its 50 percent share to Enbridge for $1.15 billion.
Rival TransCanada Corp, meanwhile, said it could build the Cushing-to-Gulf-Coast leg of its proposed Keystone XL pipeline by early next year. pending consultations with the U.S. State Department.
"The reversal of the Seaway will likely accelerate the anticipated clearing of the Midwest surplus, reducing the reliance next year on expensive barge transportation," Goldman Sachs analyst David Greely wrote in a note to clients. The bank brought forward its $6.50 spread forecast by six months. - Reuters
Pipeline initiatives announced on Wednesday to unclog a year-long bottleneck in the transportation of crude in America's Midwest helped U.S. oil prices to surge on expectations of a swift collapse in inventories. Brent prices, on the other hand, closed down, narrowing the gap between the two oil prices to the smallest since March.
Copper, gold, soybeans and coffee fell on weaker fundamental outlooks and the dollar's rise to a five-week high against the euro as rising French and Italian borrowing costs heightened worries about the euro zone.
The 19-commodity Reuters-Jefferies CRB index rose by just half a percent as the 3 percent surge in U.S. crude - its main component - was offset by losses in the broader market.
U.S. crude for January delivery closed at $102.60, rising $3.17, which sent the transatlantic arbitrage to Brent tumbling to below $10 from record highs above $28 in October.
The December contract for U.S. crude, which expires on Friday, settled at $102.59, up $3.22, after jumping to a session high $102.89, the loftiest intraday price since June 1.
Prices last settled above $100 on June 9. Brent settled at $111.88 a barrel, falling 30 cents. U.S. prices shot higher after Canada's Enbridge and Enterprise Products Partners on Wednesday announced a plan to reverse the flow of an Oklahoma-to-Texas pipeline to send crude locked up at the Cushing, Oklahoma oil hub to the Texas coast. Earlier, ConocoPhillips said it had sold its 50 percent share to Enbridge for $1.15 billion.
Rival TransCanada Corp, meanwhile, said it could build the Cushing-to-Gulf-Coast leg of its proposed Keystone XL pipeline by early next year. pending consultations with the U.S. State Department.
"The reversal of the Seaway will likely accelerate the anticipated clearing of the Midwest surplus, reducing the reliance next year on expensive barge transportation," Goldman Sachs analyst David Greely wrote in a note to clients. The bank brought forward its $6.50 spread forecast by six months. - Reuters
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