UPDATE 11-Oil slips but pares loss on shut Canada-U.S. pipeline

Thu Oct 18, 2012 5:32pm EDT

Related Topics

* U.S. jobless claims rise sharply, hurting oil
    * Goldman cuts 2013 Brent price forecast
    * Coming up: CFTC positions data 3:30 p.m. EDT Friday

 (Adds detail in paragraphs 11, 20-22)
    By Robert Gibbons
    NEW YORK, Oct 18 (Reuters) - Oil prices fell on Thursday on
the approaching restart of a North Sea oil field and weak U.S.
jobless claims data, but with losses pared after news a pipeline
carrying Canadian crude oil to the United States had shut.
    U.S. crude futures ended near flat and Brent crude pared
losses on news TransCanada Corp has shut down its
590,000-barrel per day (bpd) Keystone pipeline running from
Alberta into the United States. The shutdown is expected to last
for three days, the company said. 
    "The market is in a phase where there is a strong reaction
to infrastructure issues, although refinery snags are of greater
import given low refined product storage levels," said John
Kilduff, partner at Again Capital LLC in New York.
    "Still, if this crude oil pipeline issue does not clear
quickly, we will see further gains," Kilduff added.
    Oil prices felt pressure after a government report showed
initial jobless claims rose last week, although some analysts
noted that the four-week moving average was down from a month
earlier. 
    Earlier, indications of improving supply weighed on crude,
countering any support from data showing that China's
third-quarter slowdown was not worse than analyst expectations.
    The North Sea Buzzard oil field, Britain's largest, is
scheduled to restart this weekend after maintenance, increasing
supply of crude underpinning the Brent contract. U.S. crude
stocks rose more than expected last week, the Energy Information
Administration (EIA) said in a report on Wednesday.
  
    Brent December crude fell 80 cents to settle at
$112.42 a barrel. Prices recovered after falling to $111.57,
below the 200-day moving average of $112.24, a technical level
monitored by chart-watching traders and analysts.
    U.S. November crude dipped 2 cents to settle at
$92.10 a barrel. It reached $92.59 after dropping to $90.66, and
below that, a test of technical support could be expected at the
100-day moving average of $89.92.
    The U.S. November crude contract expires on Oct. 22.
    Total trading volumes were tepid, with turnover for Brent
and U.S. crude under 30-day averages. U.S. crude dealings
outpaced Brent's.
    U.S. refined products futures were mixed, reflecting a
switch in seasonal focus from summer driving demand to the
approaching demand for heating fuel during the Northern
hemisphere winter.
    RBOB gasoline fell a sixth straight day, sliding 3.66
cents to settle at $2.7451 a gallon. Thursday's $2.7112 low
trade was the weakest since early July. 
    Heating oil futures managed a 0.28 cent gain to
$3.1866 a gallon.
    
    CHINA'S SLOWING GROWTH
    Crude futures had been supported early on Thursday by news
that China's economy grew 7.4 percent in the third quarter from
a year ago, in line with forecasts. Industrial production,
retail sales and investment data were all slightly ahead of
expectations. 
    China's growth rate slowed for a seventh straight quarter
and missed the official 7.5 percent target, falling short of the
official target for the first time since first-quarter 2009.
    "The Chinese data was pretty neutral for the market," said
Tony Machacek, an oil futures broker at Jefferies Bache in
London. "If support around $113 to $112.50 gives way, we could
fall quite a bit lower."
    Adding to oil's bearish posture, Goldman Sachs, in a note to
clients, cut its Brent price forecast for 2013 to $110 a barrel
from $130. Goldman cited an increasing outlook for supply
outside of the Organization of the Petroleum Exporting
Countries.  
    The bank, which had previously given the highest oil price
prediction among major forecasters, said it still expected the
physical market to remain tight and maintained a near-term
target of $120.
    
    IRAN AND SYRIA
    Oil prices continue to receive support from the potential
for disruption of supplies from the Middle East, as market
participants focus on Iran's dispute with the West over Tehran's
nuclear program and fighting in Syria.
    Iran is believed to be further increasing its uranium
enrichment capacity at its Fordow plant buried deep underground,
according to Western diplomats. 
    The international mediator on Syria will go to Damascus in
the next few days to try to broker a brief ceasefire in the war
between President Bashar al-Assad's government and rebels during
the Islamic Eid al-Adha festival.    
    
    

 (Additional reporting by Alex Lawler in London and Manash
Goswami in Singapore; Editing by Maureen Bavdek,  Andrew Hay and
Kenneth Barry)
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