Brent slips as US oil gains

16 0ctober 2012, Sweetcrude, LONDON – UK Brent crude fell, Tuesday, as the front-month November contract expired ahead of weekly inventory reports expected to show US crude oil inventories rose last week.

Expiring November Brent retreated only after reaching a four-week high above $116 a barrel and after Brent’s premium to US crude advanced to $24.28, the highest since October 2011, Reuters reported.

US crude seesawed most of the day, but managed a higher settlement, receiving support from a rally on Wall Street and from a weaker dollar.

Expiring Brent November crude fell $0.73 to go off the board at $115.07 a barrel.

It reached $116.20, the highest for Brent since prices hit $117.02 on 17 September.

Brent December crude fell $0.40 to settle at $114 a barrel, trading from $113.48 to $114.87.

US November crude rose $0.24 to settle at $92.09 a barrel, trading from $91.30 to $92.32. The US November crude contract expires on 22 October.

Brent’s premium to US crude fell back and ended at $22.98 a barrel, based on November settlements, after scaling $24 during the session.

Brent and US crude received a boost early when the euro reached a one-week peak against the US dollar on speculation Spain may seek a bailout and end the uncertainty about its intentions.

A German ZEW index of investor sentiment rose for a second straight month in October, news that was also seen as giving support to the euro and crude futures.

But rising US crude oil stockpiles and concerns about economic growth in Europe and China continue to keep bullish sentiment curbed.

“Crude got a temporary boost on the expectations that Spain will ask for a bailout, and end the uncertainty, but the consensus is that inventory numbers are going to be bearish,” Phil Flynn, analyst at Price Futures Group in Chicago, told the news wire.

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