NYMEX-U.S. oil edges up towards $99 after crude stockpiles drop

Tuesday, 10 Dec 2013 | 7:35 PM ET

SINGAPORE, Dec 11 (Reuters) - U.S. oil futures traded at their highest in six weeks above $98 a barrel on Wednesday after U.S. data showed a larger-than-expected drop in crude inventories.

Traders are also betting on a narrower spread between Brent and West Texas Intermediate (WTI) futures as they expect changes in pipeline flows to ease a supply glut at the WTI delivery point in Cushing, Oklahoma.

Brent's premium to U.S. crude futures <CL-LCO1=R> settled on Tuesday at $10.87 a barrel, the narrowest spread in nearly five weeks.

Royal Dutch Shell moved closer on Tuesday to shipping a glut of light sweet oil from Texas to Louisiana after it filed tariffs for its Houston-to-Houma pipeline reversal with federal regulators. A Shell spokeswoman said the line would be operational by year-end.

TransCanada Corp said on Monday it had begun filling its 700,000 barrel-per-day (bpd) oil pipeline, which will transport crude from Cushing to Gulf Coast refiners.


* U.S. crude futures for January delivery had climbed 15 cents to $98.66 a barrel by 0017 GMT after a 1.2 percent rise the previous day.

* January Brent crude closed down 1 cent at $109.38 a barrel on Tuesday.

* Crude inventories fell by 7.5 million barrels in the week to Dec. 6 to 370.3 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. Analysts in a Reuters poll had expected a 3-million barrel drop.

* U.S. oil production hit its highest level in 25 years in November, reaching an average of 8 million barrels per day, the U.S. Energy Information Administration said in its monthly short-term energy outlook.

* OPEC has trimmed its crude oil output towards next year's global requirement, the exporter group said on Tuesday, further whittling away at a supply surplus that could weigh on prices.

* Leaders of a movement seeking autonomy for Libya's eastern Cyrenaica region said on Tuesday they could allow oil exports to resume on Sunday from several ports, if Tripoli meets their demands and allows the region to take its share of crude.

* Senior Iranian officials indicated on Tuesday that progress was being achieved in expert-level talks between Tehran and six world powers over the implementation of a landmark nuclear deal.

* China's implied oil demand rose 1.5 percent in November from the preceding month to a five-month high, as two major refineries restarted after an overhaul, but full-year growth is heading for the weakest rise in at least five years.


* Asian share markets look set for another indecisive session on Wednesday as investors booked profits on a range of once-crowded positions, sending the dollar and Wall Street lower, while lifting the euro, bonds and gold.


* The following data is expected on Wednesday:

- 0745 GMT France Current account

- 1200 GMT U.S. weekly mortgage market index

- 1430 GMT U.S. Treasury Secretary Jack Lew testifies before congressional committee

- 1530 GMT U.S. EIA weekly crude stocks

- 1530 GMT U.S. EIA weekly dist. stocks

- 1530 GMT U.S. EIA weekly gasoline stocks

- 1900 GMT U.S. Federal budget

(Reporting by Florence Tan; Editing by Joseph Radford)