* Higher-than-expected oil inventory build weighs on U.S.
* Libya exports in focus as down to 10 pct of capacity
By Jeanine Prezioso
NEW YORK, Oct 30 U.S. oil futures extended their
move lower for a second consecutive day on Wednesday after
government data showed large inventory builds, further widening
the domestic oil's discount to international benchmark Brent.
Disruptions to Libyan oil exports have cut supplies to
Europe and Asia while supporting Brent prices.
The divergent courses of the North American and
international oil markets boosted Brent's premium over the U.S.
benchmark to more than $13 a barrel.
The U.S. Energy Information Administration reported a sharp
4.1-million-barrel rise in crude stocks in the United States.
Supplies at the Cushing, Oklahoma, U.S. oil storage hub rose 2.2
million barrels, their third straight weekly rise.
Brent crude for December delivery settled 85 cents
higher at $109.86, after touching a one-week high of $110.16.
Stronger gasoline prices also underpinned Brent. U.S.
gasoline futures settled at a one-week high, up 4.10
cents at $2.6508 per gallon after a report that Irving Oil Ltd
will return to service its gasoline-making unit at its 300,000
barrel per day Saint John, New Brunswick, refinery.
The November RBOB contract expires at the end of
trading on Thursday.
"With Brent rising and that refinery news, gasoline was more
vulnerable to a little rally," said Gene McGillian, analyst with
Tradition Energy in Stamford, Connecticut.
U.S. crude settled at a more than one-week low,
down$1.43 per barrel to $96.77, having hit an intraday low of
The discount of West Texas Intermediate (WTI) - the U.S. oil
grade that underpins the benchmark oil futures contract - to
Brent expanded to $13.36 a barrel. It settled $2.28
higher at $13.09.
Analysts are calling for the spread to narrow as U.S.
refineries emerge from maintenance season, which has slowed
domestic demand for crude.
"The widening spread will encourage refiners to return to
production and eventually narrow the spread," said Bill O'Grady,
chief market strategist at Confluence Investment Management in
Speculators cut their net long U.S. crude futures and
options positions in the week to Oct. 15, the U.S. Commodity
Futures Trading Commission said on Wednesday.
FED, IRAN, LIBYA IN FOCUS
While U.S. oil prices sank, Brent prices were supported by
weekend reports of a sharp drop in Libya's crude oil exports, as
protests halted operations at ports and fields.
Italian energy major Eni, the biggest foreign
producer in Africa, cut its production outlook for 2014 due to
supply cuts in Libya and Nigeria.
The U.S. Federal Reserve said on Wednesday it would continue
its $85 billion of monthly asset purchases for the time being,
underpinning oil prices.
Investors will also keep an eye on a series of technical and
diplomatic meetings on Iran's nuclear program, which could pave
the way for an easing of sanctions on Iranian oil exports.
Any increase in Iranian oil exports may take some time,
however, while the U.S. Senate is debating fresh sanctions aimed
at further curbs of the country's oil sales, an influential