* Brent crude oil prices hit three-month high
* Fed's promise to keep spending supports demand outlook
* Euro zone economic sentiment rises for a third month
(Updates with settlement prices)
By Gabriel Debenedetti
NEW YORK, Jan 31 Brent crude oil futures rose to
three-month highs on Thursday, widening its premium over U.S.
crude, concerns about rising crude stockpiles in the U.S.
Midwest prompted heavy trading based on the spread between the
Brent's premium to U.S. crude jumped to $18 a barrel for the
first time since early January. Traders cited concerns about
stockpiles at the Cushing, Oklahoma delivery point for the U.S.
contract, which have pushed to record highs.
Traders focused on the timeline for the resumption of
previous throughput levels on the Cushing-to-Texas Seaway
pipeline, which started up in early January. The line will move
U.S. and Canadian crude to the Gulf Coast, where it fetches a
Seaway was forced last week to restrict throughput on the
southernmost leg of the line to Jones Creek, Texas, after a key
refinery customer began maintenance. Operator Enterprise Product
Partners said on Thursday a key pipeline connection to Houston,
which will create another outlet for oil moving into Jones Creek
terminals, will be completed in the second half of the year.
Front-month February U.S. gasoline futures snapped 10
straight days of gains that had tacked 12 percent on to the
price as the contract headed into expiry at settlement.
Brent rose 65 cents to settle at $115.55 a barrel, the
highest settlement since mid-October, reaching a session peak of
$115.76. For the month, Brent crude futures gained $4.44, or 4
The spread between Brent and U.S. crude settled at 18.06 as
U.S. crude lost 45 cents to settle at $97.49 a barrel, a
say after it hit the highest price in more than four months. For
the month, U.S. crude gained $5.67, or 6.17 percent.
Trading was heavy on the U.S. contract, up nearly 35 percent
over the 30-day moving average, while Brent volumes were closer
to normal levels for that period.
Expiring February RBOB gasoline futures settled down
0.0091 cents at $3.0258 a gallon. The more heavily traded March
contract, which will become the front month on Friday, also
The market was also balancing U.S. data showing unemployment
benefits claims rose last week against positive euro zone
sentiment data from Wednesday and U.S. Federal Reserve comments
that it would maintain its stimulus plan until the economic
outlook improves substantially.
Investors have been closely watching economic data from top
consumers for signs that sluggish fuel demand will improve.
"The oil complex, over the last one or two weeks, has moved
back in sync with what's happening with the economy," said
Dominick Chirichella, senior partner at Energy Management
Institute in New York.
Market players said oil price movements could be limited
until Friday's release of U.S. nonfarm payrolls data and
official manufacturing data out of China, which is expected to
show factory activity picking up pace.
"We see persistent macro-driven trading for oil with much
attention paid to the U.S. non-farm payrolls report tomorrow,"
said VTB Capital oil strategist Andrey Kryuchenkov.
"Gasoline is just retracing a little bit from a bit much of
an over-reaction yesterday. I don't think the inventories were
signaling that we're going to have a shortage of gasoline
anytime soon," Chirichella said, referring to a stockbuild in
the East Coast last week reported by U.S. Energy Information
Administration on Wednesday.
Supply worries stemming from tensions in the Middle East
kept buoying prices for Brent, the main gauge for global oil
Syria warned on Thursday of a possible "surprise" response
to an Israeli attack on its territory, and Russia condemned the
strike as an unprovoked violation of international law.
Tension over Iran's uranium enrichment plan continued to
bubble after a plan to upgrade its refining equipment was
delivered to the U.N. nuclear agency.
Such a step could enable Iran to refine uranium faster than
it can at the moment and increase concerns in Western states and
Israel about the goals of Tehran's nuclear program, which they
fear has military aims. Iran says its work is peaceful.
(Additional reporting by Jessica Donati in London and Jessica
Jaganathan in Singapore; editing by William Hardy, Peter
Galloway and David Gregorio)