Brent Steady Above $109 As US Data Comes In
Brent prices traded steadily above $109 on Tuesday morning after US prices slipped below $100 per barrel for the first time in nearly three months.
News that Midwestern inventories were on the rise helped push US crude lower, widening the gap with Brent to its largest in six months.
After months of declining stockpiles in Cushing, Oklahoma, data from the US Energy Information Administration showed that crude stocks rose by 366,000 barrels. CNBCreported that the EIA's data for the week of October 11 showed domestic crude stockpiles grew by 4 million barrels. The data was delayed until Monday after the government shutdown left the agency unable to report due to a lack of funding.
Brent prices were also supported by global supply problems, especially in Northern Africa. Libya is still struggling to return to full export capacity after labor strikes closed down all of the nation's largest export terminals. Now, as the government works to resolve the issue, oilfields are reopening, however the nation's oil exports are still operating at less than capacity. In Nigeria, theft has kept some of the nation's oil from making it to the market.
Oil prices also got a boost as investors speculated that the Federal Reserve taper would be put off until 2014. Delayed nonfarm payrolls data due out on Tuesday is expected to play into the ongoing taper debate, however most believe that in the wake of the government shutdown, the US central bank will maintain its accommodative stance in order to cushion any damage the shutdown has done.
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