U.S. oil futures rose $2 a barrel to a four-week high on Tuesday in a third straight day of gains on expectations that the January start up of a pipeline from Cushing, Oklahoma, to the Gulf Coast would drain crude stocks at the giant storage hub.
Ahead of a Wednesday meeting of the Organization of Petroleum Exporting Countries (OPEC), at which production targets are expected to remain unchanged, Iran and Iraq on Tuesday gave notice of substantial oil output increases to come, saying others in the producer cartel will need to give way to make room for them.
TransCanada's 700,000 barrel-per-day Cushing-to-Port Arthur, Texas, pipeline will begin service on Jan. 3, the company said in a tariff filing with the Federal Energy Regulatory Commission (FERC) on Monday after the trading session closed for the day.
Brent for January delivery was up more than $1 to trade under $113 a barrel, the highest since August 28. U.S. crude, also known as West Texas Intermediate or WTI, rallied by $2.22 to settle at $96.04 a barrel, its highest since October 31
Once opened, the line should draw down inventories at Cushing, the delivery point of the U.S. oil futures contract, supporting U.S. crude futures relative to international benchmark Brent crude.
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