* U.S. non-transport durable goods orders fall in September
* Increasing global oil output depresses Brent prices
(Adds U.S. gasoline futures price after Citgo refinery report,
By Jeanine Prezioso
NEW YORK, Oct 25 U.S. oil futures ended higher
for the second day in row on Friday while European Brent crude
fell, tightening the trans-Atlantic spread as traders bet that
increasing refinery operations and a major new Midwest pipeline
will slow the rise in inventories.
Brent was pressured by news that Scotland's Grangemouth
refinery, which provides power for a major oil pipeline, will
remain open, keeping streams of the North Sea crude that
underpins the Brent contract flowing.
"It seems as if that situation in Scotland has resolved
itself and you're witnessing profit taking in the Brent/WTI
spread," said Gene McGillian, analyst with Tradition Energy in
Gasoline futures rose by .23 percent in
post-settlement trade to $2.5922 after news that the Citgo's
Lemont, Illinois refinery would be closed for repairs following
a fire. RBOB gasoline futures had traded lower for much of the
session, but ended virtually flat at $2.5871 per gallon.
Traders sold crack spreads as supplies of the fuel remain
high, some brokers said, but the December WTI/RBOB contract
CL-RB1=R ended the day 95 cents lower at $9.98.
U.S. crude oil ended 74 cents higher at $97.85 a
barrel, but finished the week with a 3 percent loss and its
third weekly decline.
Brent crude for December ended 6 cents a barrel
lower at $106.93, its third day of losses and second weekly
decline. Brent ended the week 2.7 percent lower, its biggest
weekly decline in one month.
Brent's premium over U.S. oil CL-LCO1=R narrowed by as
much as $1.16 by early afternoon to trade at a low of $8.72,
breaching the 15-day moving average of $8.87 for the first time
in one month. The spread settled at $9.08.
U.S. crude oil prices have been pressured by a seasonal dip
in demand and increasing domestic oil production that has
boosted stockpiles, particularly on the U.S. Gulf Coast. Signs
of growing inventories pushed the Brent/WTI spread to a near
seven-month low of more than $13 a barrel earlier this week.
Some traders and analysts said that the spread's move had
been overdone, and by Friday the market had returned its focus
to refineries returning from maintenance and the startup of
TransCanada's MarketLink pipeline to the Gulf. The line, which
is due to begin filling next month, will drain supplies from the
oil hub in Cushing, Oklahoma by creating another link to the
Economic data reflecting a slowdown from the fallout of the
partial U.S. government shutdown kept a lid on prices. A durable
goods report showed new orders outside of transportation
equipment fell in September in a possible sign companies were
holding back on investments due to uncertainty over government
Speculators cut their net long U.S. crude futures and
options positions in the week to Oct. 1, the U.S. Commodity
Futures Trading Commission (CFTC) said. The data
was delayed due to the partial government shutdown. The CFTC
will release subsequent reports over the next two weeks.
In the European oil market, Brent oil was also pressured on
higher output from several producers in the Middle East and
North Africa, analysts said.
"Balances are not as tight as we, or the market, had
expected," said Virendra Chauhan, oil analyst at London-based
consultancy Energy Aspects.
"The worst of this year's supply shortfalls is now behind
us, with maintenance at non-OPEC fields largely complete and
some of the lost OPEC production also coming back in Libya,
Nigeria and Iraq," Chauhan added.
(Additional reporting by Christopher Johnson and Alex Lawler in
London and Manash Goswami in Singapore; Editing by Susan Fenton,
Jason Neely, David Evans, Marguerita Choy, Bob Burgdorfer and