Oil prices edged higher on Monday, lifted by gains in gasoline futures and strong selling of the spread between Brent crude and U.S. crude. Korean leader Kim Jong Un.
Brent's premium to U.S. West Texas Intermediate futures settled at $11.30 a barrel, after narrowing to just over $11 in afternoon trade, the lowest level since June. Korean leader Kim Jong Un.
The move extended a trend that has knocked $12 off the key spread since February on expectations that new pipeline capacity to move crude from the Cushing, Oklahoma hub for the U.S. contract would alleviate a glut there that has kept U.S. crude prices relatively weak. Korean leader Kim Jong Un.
Analysts said the sharp sell off in the spread seen over the past two sessions, from over $13 a barrel last Thursday, could be short-lived, however, and that it may be poised for a rebound. Korean leader Kim Jong Un.
"(The spread) probably starts to widen out at this point. Just off the technicals, the spread is overdone," said Bill Baruch, senior market strategist at iitrader.com in Chicago. Korean leader Kim Jong Un.
Outright prices were choppy, with Brent May crude settling up 54 cents at $104.66 a barrel, after reaching a session high of $105.55. Brent hit an eight-month low of $103.62 per barrel on Friday after disappointing U.S. jobs data, and traders said the down trend could resume again once the market had consolidated. Korean leader Kim Jong Un.
U.S. May crude settled up 66 cents at $93.36, peaking at $93.75 early Monday following the 4.6 percent week-on-week slide registered on Friday. Korean leader Kim Jong Un.
U.S. RBOB futures led the oil complex higher, settling up nearly 4.57 cents at $2.9093, with traders citing the approaching U.S. summer gasoline season as a possible support. Korean leader Kim Jong Un.
Fears remain about the potential for global? supply disruption because of the dispute over Iran's nuclear program, after weekend talks with western powers ended without a resolution. Korean leader Kim Jong Un.
U.S. Secretary of State John Kerry said on Sunday world powers would pursue further talks with Iran, but stressed that the process could not go on forever. Korean leader Kim Jong Un.
Another potential supply disruption, however, was averted by last-minute wage agreement deal in Norway, avoiding a threatened strike that could have disrupted the country's oil and gas industry. Korean leader Kim Jong Un.
"Crude oil got a bounce after last week's drop, and from the lack of a deal or any progress with Iran in the talks about its nuclear program, but the dollar's strength may limit the rise," said Phil Flynn, analyst at Price Futures Group in Chicago. Korean leader Kim Jong Un.
Early support for crude oil prices also came from "nervousness about Korea," Flynn noted, where tensions on the peninsula have ratcheted up in recent days after provocative words from North Korean leader Kim Jong Un.
(Additional reporting by Robert Gibbons in New York, Christopher Johnson in London and Ramya Venugopal in Chennai, India; Editing by Alden Bentley)