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US crude falls on growth worries, but Brent rallies

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The gap between US benchmark crude and Brent crude widened further this afternoon as oil prices in London and New York moved in opposite direction.

Futures for Brent crude rose ahead of a two day meeting of euro zone finance ministers in Poland, which will also be attended by US Treasury Secretary Timothy Geithner.

Traders are hoping the ministers will agree on a plan to prevent the debt crisis from spreading across Europe, which could trigger a financial meltdown and reduce energy demand.

Confidence in Europe’s ability to tackle its fiscal problems was lifted by the European Central Bank’s decision to provide three month US dollar loans to European banks in cooperation with four other central banks including the Federal Reserve.

Across the Atlantic, US oil prices were in decline under pressure from weak US data and this week’s downgrades of the International Energy Agency’s (IEA) global oil demand forecasts.

On Tuesday, IEA reduced its global consumption projection by 200,000 barrels per day (bpd) for 2011 and by 400,000 bpd for 2012 due to slower than expected economic growth.

Yesterday’s jobs data added to economic jitters, revealing s surprise increase in US jobless claims to 428,000 last week.

Likewise, yesterday’s manufacturing data disappointed, showing a decline in the Empire State index from minus-7.7 in August to minus-8.8 in September, while the Philly Fed rose 13.2 to minus-17.5 in September, but still missed expectations.

Conversely, today’s consumer confidence index from the University of Michigan came in ahead of estimates at 57.8, but that data provided little support to oil prices.

US light, sweet crude
for October delivery, currently the most actively traded stock on the New York Mercantile Exchange (NYMEX), fell 13 cents to US$89.27/barrel in morning trade in New York.

November Brent crude rallied US$1.15 to US$113.61/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Nostra Terra Oil & Gas (LON:NTOG)
, up 18.5 percent at 0.669 pence at midday

Enegi Oil (LON:ENEG), up 13 percent at 10.32 pence

Cove Energy (LON:COV)
, up 8.5 percent at 81.5 pence

Coastal Energy (LON:CEO), up 8 percent at 738.5 pence

Kea Petroleum (LON:KEA), up 5 percent at 5.12 pence

The top fallers were:

Aurelian Oil & Gas (LON:AUL)
, down 64 percent at 29.5 pence at midday

Petroceltic International (LON:PCI), down 12 percent at 4.5 pence

Roxi Petroleum (LON:RXP), down 9.5 percent at 3.28 pence

Nighthawk Energy (LON:HAWK), down 9.5 percent at 4.3 pence

Petro Matad (LON:MATD), down 7 percent at 41 pence

Quick facts: Brent Crude Oil

Price: - -

LSE:BRENT
Market: LSE
Market Cap: -
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