Brent crude fell on Monday as well-supplied markets and limited demand from European refiners pushed prices lower, narrowing the gap between the global and U.S. oil benchmarks.
The international contract's premium to U.S. oil was further eroded by news that TransCanada has begun filling its 700,000 barrel-per-day oil pipeline that will transport crude from the Cushing, Oklahoma, storage hub to Gulf Coast refiners.
U.S. crude oil rose on the pipeline news but soon traded lower after St. Louis Federal Reserve President James Bullard said one reaction to improvement in the U.S. job market would be a small scale back in the Fed's bond buying program, a policy which has supported commodity prices.
Markets are also brimming with supply, with Saudi Arabia's production little changed in November from the previous month and OPEC producers Iraq and Iran making clear they have no interest in contributing to a collective cut in output should one be required next year.
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