Oil prices up about one per cent
By Barani Krishnan
NEW YORK, Sept 15 (Reuters) – Oil prices rose about 1 percent or more on Thursday after tracking a rally in gasoline futures sparked by a delayed restart of the main gasoline line at Colonial Pipeline, the No. 1 carrier for the motor fuel in the United States.
A run up in Wall Street shares also boosted oil prices as weak U.S. economic data dampened the likelihood of a Federal Reserve rate hike this month.
Brent crude futures settled up 74 cents, or 1.6 percent, at $46.59 a barrel, after a session high at $47.
U.S. West Texas Intermediate (WTI) crude futures rose 33 cents, or 0.8 percent, to close at $43.91.
Colonial’s main gasoline and distillate line was shut on Friday after a 6,000-barrel leak in Alabama. It was to have restarted this weekend, but the company said that will now be delayed till next week.
Gasoline futures were also supported by news BP Plc will conduct repairs this weekend on the large crude distillation unit at its 413,500 barrel per day Whiting, Indiana refinery, cutting production by at least 50 percent.
Over the previous two sessions, oil prices fell 6 percent, pressured by data showing large weekly builds in U.S. petroleum products, and forecasts by the world’s energy watchdog and OPEC that signaled the global crude glut could persist into 2017.
On Thursday, traders and investors bought crude to cover short positions as gasoline rallied about 5 percent or more . U.S. equities rose more than 1 percent.
“I think the oil market clearly overreacted to the products build data we had yesterday and that’s indicative of today’s price rebound,” said Jay Hatfield, portfolio manager at New York-based InfraCap MLP, which invests in equities of energy partnerships.
“Also, we’re undeniably in the $40-$50 a barrel range, which means when we get below $45, we are most likely to bounce up.”
U.S. inventories of distillates, which include diesel and heating oil, rose 4.6 million barrels last week, government data on Wednesday showed, much more than analysts had expected and the biggest weekly build since January.
Despite Thursday’s gains in crude, Brent and WTI remained down about 3 percent or more on the week. Some expected more pressure on the market as Nigerian and Libyan supplies return.
Libya’s National Oil Corp said it was lifting force majeure at three ports. In Nigeria, offers for October-loading of its Qua Iboe crude despite a force majeure in place.
“The market could care less about strong physical markets when it sees potential for another 600,000 barrels per day of crude,” Scott Shelton, broker with ICAP in Durham, North Carolina, said, referring to the anticipated rise in Libyan and Nigerian supplies.
(Additional reporting by Dmitry Zhdannikov in LONDON; Editing by Marguerita Choy and Will Dunham)