* Futures cut early gains
* Lack of Iran-West nuclear talks progress supportive
* Norway wage deal averts oil worker strike
* Coming up: API oil data 4:30 p.m. EDT Tuesday
(Adds quote, background)
By Anna Louie Sussman
NEW YORK, April 8 Oil prices edged higher on
Monday, lifted by gains in gasoline futures and strong selling
of the spread between Brent crude and U.S. crude.
Brent's premium to U.S. West Texas Intermediate futures
CL-LCO1=R settled at $11.30 a barrel, after narrowing to just
over $11 in afternoon trade, the lowest level since June.
The move extended a trend that has knocked $12 off the key
spread since February because of the start-up of new pipeline
capacity that will alleviate a glut of crude at the Cushing,
Oklahoma, hub for the U.S. contract. In addition, supply
concerns around Brent-related crude have eased, weakening the
futures contract relative to U.S. oil.
"Improved output of North Sea production and the expected
increases later in the year, and the displacement of West
African Barrels that were previously bound for the U.S. which
are now competing with North Sea barrels for Asian market
share," are all contributing to an increase in Brent supply,
said John Kilduff, a partner at Again Capital LLC, referring to
the decline in U.S. dependence upon North Sea and West African
crude which is redirecting those barrels to Asia.
Analysts said the sharp sell off in the spread seen over the
past two sessions, from over $13 a barrel last Thursday, could
be short-lived, however, and that it may be poised for a
"(The spread) probably starts to widen out at this point.
Just off the technicals, the spread is overdone," said Bill
Baruch, senior market strategist at iitrader.com in Chicago.
Outright prices were choppy, with Brent May crude
settling up 54 cents at $104.66 a barrel, after reaching a
session high of $105.55. Brent hit an eight-month low of $103.62
per barrel on Friday after disappointing U.S. jobs data, and
traders said the downtrend could resume again once the market
U.S. May crude settled up 66 cents at $93.36, peaking
at $93.75 early Monday following the 4.6 percent week-on-week
slide registered on Friday.
U.S. RBOB futures led the oil complex higher,
settling up nearly 4.57 cents at $2.9093, with traders citing
the approaching U.S. summer gasoline season as a possible
Fears remain about the potential for global supply
disruption because of the dispute over Iran's nuclear program,
after weekend talks with western powers ended without a
U.S. Secretary of State John Kerry said on Sunday world
powers would pursue further talks with Iran, but stressed that
the process could not go on forever.
Another potential supply disruption, however, was averted by
last-minute wage agreement deal in Norway, avoiding a
threatened strike that could have disrupted the country's oil
and gas industry.
"Crude oil got a bounce after last week's drop, and from the
lack of a deal or any progress with Iran in the talks about its
nuclear program, but the dollar's strength may limit the rise,"
said Phil Flynn, analyst at Price Futures Group in Chicago.
Early support for crude oil prices also came from
"nervousness about Korea," Flynn noted, where tensions on the
peninsula have ratcheted up in recent days after provocative
words from North Korean leader Kim Jong Un.
(Additional reporting by Robert Gibbons in New York,
Christopher Johnson in London and Ramya Venugopal in Chennai,
India; Editing by Alden Bentley)