A Review of the Nigerian Energy Industry

Oil flat as US inventories soar

18 October 2012, Sweetcrude, HOUSTON – RISING US crude oil and gasoline stockpiles and tepid global demand for petroleum in its wake in its wake has forced crude oil prices down.

US RBOB gasoline futures led the retreat, dropping more than 2%, pressured by the Energy Information Administration’s weekly report showing inventories rose 1.72 million barrels last week, more than three times the consensus expectations, according to Reuters report.

The Energy Information Administration, EIA, said crude stocks in the world’s largest oil consumer rose 2.86 million barrels last week, more than the expected rise of 1.7 million barrels.

Brent December crude fell $0.78 to settle at $113.22 a barrel, having swung from $112.80 to $114.31.

US front-month November crude edged up 3 cents to settle at $92.12 a barrel, after trading from $91.55 to $92.85.

Brent’s premium to US crude ended at $20.63 a barrel based on December contract settlements.

The spread, comparing November contracts, reached $24.28 during Tuesday’s session, highest since October 2011.

Brent’s weakness, as US crude seesawed near flat, was attributed to Brent’s December contract moving into the front-month spot after the November contract’s expiration on Tuesday.

The Brent November contract received a lift from current maintenance-related curbs on North Sea production and from delays to cargoes, which may ease.

“The Brent curve is … coming under pressure on lack of significant North Sea buying interest that appeared to be (associated) with the expected resumption of normal Buzzard Field production activities next week,” Jim Ritterbusch, president at Ritterbusch & Associates said in a research note.

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