Oil prices retreat after hitting five-month highs
New York oil prices fell on Thursday after hitting fresh five-month high levels following a deal that reverses the build-up of crude stockpiles in the United States.
London: New York oil prices fell on Thursday after hitting fresh five-month high levels following a deal that reverses the build-up of crude stockpiles in the United States.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in December, reached USD 103.37 a barrel -- the highest level since June 1. It later retreated to USD 102.36, down 23 cents compared with Wednesday's close.
Brent North Sea crude for delivery in January slid USD 1.86 to USD 110.53 a barrel in London deals, as traders there focused on the risk of contagion from the eurozone debt crisis and its impact on European energy demand.
New York oil prices first surged to five-month highs on Wednesday following the announcement of a pipeline sale.
Canadian company Enbridge on Wednesday bought ConocoPhillips' 50-percent stake in the 330,000 barrel-per-day Seaway pipeline, which runs between the US Gulf of Mexico coast and the Cushing, Oklahoma oil storage hub.
Enterprise Product Partners, which owns the other 50 percent of Seaway, said it would reverse the pipeline to move oil to the Gulf coast refining hub from Cushing starting in mid-2012.
This is expected to further narrow the broad gap between London and New York oil prices caused by high stockpiles in Cushing.
"The reversal of the Seaway pipeline (has already) resulted in a significant narrowing of the WTI-Brent spread, due to the notion that the so-called US Midwest glut will now be resolved," Barclays Capital analyst Amrita Sen said.