Oil: Seaway pipeline expansion bullish for WTI to impact Brent Crude

OKLAHOMA/MUMBAI (Commodity Online): US WTI crude oil may extend gains seen on Friday as the newly expanded Seaway oil pipeline to carry 400,000 barrels per day, began pumping oil from US Midwest region to Gulf Coast.

On New York Mercantile Exchange, WTI February contract has risen 1.74% to $94.23 per barrel in electronic trading on Monday after closing Friday at $93.26.

?On daily charts, WTI crude oil is witnessing an up trend since mid-December and currently market appears sideways to bullish,? Sreekumar Raghavan, Chief Commodity Strategist at Commodity Online said.

The completion of the Seaway pipeline expansion will weigh on Brent Crude oil prices and the differential between the WTI and Crude oil has now narrowed to $17 per barrel. Historically, WTI has traded at or above the price of Brent, a benchmark crude from Europe's North Sea region. Over the last few years Brent has fetched large premiums as surplus crude glutted the U.S. midcontinent.

The 500-mile (805 km) pipeline, a joint venture between Enterprise Product Partners and Enbridge Inc, had been shut since Jan. 2 to prepare for shipping higher volumes from Cushing, Oklahoma, to Freeport, Texas. Its earlier capacity was 150,000 bpd.

At India?s Multi Commodity Exchange (MCX), crude oil January is trading flat at Rs 5135 per barrel.?At India?s Multi Commodity Exchange (MCX), crude oil January is trading flat at Rs 5135 per barrel. ? ?MCX Crude oil is trading sideways and has support at 5090, 5000 levels,? Sreekumar Raghavan added.

The international crude oil price for Indian Basket as computed/published on Monday by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas went down to US$ 108.63/barrel (bbl) on 11.01.2013. This was lower than the price of US$ 109.74//bbl prevailing on the previous trading day of 10.01.2013. In rupee terms also, the crude oil price fell to Rs 5924.68/bbl on 11.01.2013 from Rs 5995.10/bbl on 10.01.2013. This was due to fall in price in dollar terms and rupee appreciation with rupee dollar-exchange rate on 11.01.2013 at Rs 54.54/US$ against Rs 54.63/US$ on 10.01.2013.

News that may impact Crude Oil:

-The U.S. economy is expected to grow by 2.5 percent in 2013, improving to 3.5 percent growth in 2014, top Fed official Charles Evans said on Monday.

- Fears of disruption of supplies from Middle East has resurfaced, recovery signs in some major economies provide support for Brent crude at $111 levels?

Source: http://www.commodityonline.com/news/oil-seaway-pipeline-expansion-bullish-for-wti-to-impact-brent-crude-52214-3-52215.html

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