Oil futures closed above $104 a barrel today, rebounding from a three-session decline, after TransCanada Corp. said it expects to complete work on the southern portion of its Keystone pipeline expansion by the end of October.
World Texas Intermediate crude oil for November delivery jumped 2 percent to end at $104.10 a barrel on the New York Mercantile Exchange. November Brent crude rose 1.2 percent to $109.19 a barrel.
The turn-around should lift Australian listed producers today such as Woodside Petroleum (ASX: WPL) and Santos (ASX: STO).
The spread between WTI and Brent oil, the European benchmark, narrowed the most in two weeks on bets the link will help reduce stockpiles at Cushing, Oklahoma, the delivery point for the WTI contract.
The 700,000-barrel-a-day pipeline will run to the Texas Gulf Coast from Cushing. Futures extended gains after a government report showed that stockpiles at the hub fell to the lowest level since February 2012.
Cushing supplies slipped 59,000 barrels to 32.8 million last week, according to the Energy Information Administration. Stockpiles at the hub have dropped 34 percent over the past 13 weeks as improved pipeline networks and shipments by rail eased a North American supply glut created by rising oil production from shale formations.
Elsewhere in the energy markets, Natural gas for November delivery slid 1.9 percent to $3.54 per million British thermal units after adding 1.4 percent in the previous session.
Heating oil for November delivery rose 1.3 percent to finish at $2.99 a gallon, while
November gasoline added nearly 0.7 percent to $2.63 a gallon.
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