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US pipeline outage boosts oil prices

Friday, September 16, 2016 - 07:08
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Oil prices edged higher on Thursday following an outage of a large US gasoline pipeline, but analysts said other bearish supply news limited the gain.

[NEW YORK] Oil prices edged higher on Thursday following an outage of a large US gasoline pipeline but analysts said other bearish supply news limited the gain.

Both crude and gasoline prices pushed higher due to a leak of 6,000 barrels of gasoline near Birmingham, Alabama from the Colonial pipeline, which carries fuel from the Gulf Coast to the eastern US.

US benchmark West Texas Intermediate for delivery in October rose 33 cents to US$43.91 a barrel on the New York Mercantile Exchange.

Brent North Sea oil for November delivery rose 74 cents to US$46.59 a barrel in London.

"I think crude oil is just being dragged with the products," said Andy Lipow, who heads the Houston oil consultancy Lipow Oil Associates. "It is a result of the leak in the Colonial pipeline system."

Traders said the oil market was still amply supplied and was further pressured by expectations of higher output from Nigeria and Libya.

"Conditions will normalise once the pipeline restarts, and that's expected over the coming weekend," said Tim Evans, an analyst at Citi Futures.

"In contrast, the global fundamentals remain under pressure, with this week's monthly reports from the DOE (US Department of Energy), Opec, and International Energy Agency all highlighting some degree of bearish revision."

AFP