| NEW YORK, July 23
NEW YORK, July 23 Brent crude rose on Tuesday,
lifted by profit-taking on the trans-Atlantic spread, China's
efforts to support its economy, and supply concerns.
Brent's premium to U.S. oil futures , which had
narrowed sharply last week and briefly inverted on Friday,
weakened for a second straight day. The spread touched the
14-day moving average of $2.68 a barrel on Tuesday, before
narrowing to $1.25 a barrel just after 1 p.m. EDT (1700 GMT).
The spread has narrowed from near $6 at the start of the
month and over $23 a barrel in February on expectations new
pipeline capacity will alleviate a glut of oil at the Cushing,
Oklahoma delivery point for the U.S. crude contract by shipping
it to the Gulf Coast.
"You are seeing a little bit of profit taking on the
spread," said Gene McGillian, an analyst at Tradition Energy in
Front-month September Brent crude oil traded up 33
cents to $108.48 a barrel at 1:15 p.m. EDT (1715 GMT).
Further support for Brent came from news that China remains
committed to steering its economy towards consumption as the
main growth driver and will fine-tune policies to deal with any
September U.S. crude futures, which became the
front-month contract on Tuesday, rose 29 cents to trade at
$107.23 a barrel. After trading over 70 on the relative strength
index, a technical sign a commodity has been overbought, for
most of July, the front-month contract has dipped below that
level over the past two sessions.
RBOB gasoline futures traded up 2 cents to more than $3.07 a
gallon, helping to counter a near 2.2 percent slide on Monday.
U.S. gasoline is up more than 11 percent this month, after a
series of refinery disruptions have stirred supply concerns in
the midst of the summer driving season.
Weekly U.S. inventory data from the American Petroleum
Institute and the U.S. Energy Information Administration, is
expected to show the fourth-straight week of declines in
commercial crude inventories, according to a Reuters poll of
seven analysts showed on Monday.
Refiners on the Gulf Coast have been cranking up crude
throughput this month as exports support margins. The API and
EIA data will be released late Tuesday and early Wednesday,
EYES ON SUPPLIES
Traders were also closely watching supply disruptions in the
United States. Enbridge Inc shut its 210,000 barrel per
day Line 81 pipeline, which carries Bakken crude from North
Dakota to Minnesota following the discovery of a small leak.
The shutdown comes as traders say ongoing maintenance at
Syncrude Canada Ltd's northern Alberta oil sands projects
tightens supplies of light sweet crude and bolsters prices for
U.S. crudes such as Light Louisiana Sweet.
In addition, traders said BP had been forced to shut
in its 250,000 bpd Thunder Horse oil platform in the Gulf of
Mexico as work was performed on the Destin natural gas pipeline
system which into which Thunder Horse connects.
BP said the North Sea Forties Pipeline System was operating
under a "minor" restriction on flows that was likely to last
another week or so.
Traders have also been focusing on violence in the Middle
East and threats to supplies from the region, which have lent
some support to Brent prices over recent weeks.
Protesters demanding jobs closed off the eastern Libyan port
of Zueitina for a sixth day on Monday, extending a halt in oil
exports, according to a senior oil industry source and one of
Six people were killed in Cairo on Tuesday in violence
between supporters and opponents of deposed President Mohamed
Mursi, state-run media reported.
Any Middle East conflict raises worries of disruption to
oil-producing areas or shipments, although none has taken place
due to the Egyptian crisis so far.