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Brent crude climbs on North Sea supply concerns

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Oil futures in New York and London were headed in different directions today.

US benchmark crude contracts were down in New York on concerns that energy demand in the US may be in decline, while London Brent rallied on optimism ahead of today’s policy announcement by the US Federal Reserve.

The US Department of Energy is set to release official inventories data for last week later in today’s session.

Expectations are for an increase after the American Petroleum Institute (API) said yesterday that oil stockpiles in the US added 2.6 million barrels, a sign that demand for oil from the world’s largest energy consumer fell.

Meanwhile, futures for Brent crude, which is less sensitive to US supplies data, were on the rise on hopes that the Fed will introduce further stimulus measures following its two day meeting, which will conclude today.

The Fed will most likely announce the so-called operation twist, or increasing the share of longer maturing securities in its portfolio by selling short term bonds to curb long term interest rates.

Besides anticipation of further action to shore up the economy by the Fed, Brent crude was supported by further disruptions in supplies from the North Sea.

A Reuters report said most of September’s shipments of North Sea Forties crude, the main component of the Brent benchmark, will be delayed due to lower than expected production at the Buzzard field in the North Sea, which is operated by Nexen (NYSE:NXY).

US light, sweet crude
for November delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), fell 18 cents to US$86.74/barrel in morning trade in New York.

November Brent crude rallied 63 cents to US$111.24/barrel on London’s ICE Exchange this afternoon.

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

Matra Petroleum (LON:MTA)
, up 9.5 percent at 1.29 pence at midday

Roxi Petroleum (LON:RXP), up 9 percent at 3.4 pence

Regal Petroleum (LON:RPT)
, up 8.5 percent at 44.5 pence

Egdon Resources (LON:EDR), up 8.5 percent at 14.9 pence

Gulf Keystone Petroleum (LON:GKP)
, up 6.5 percent at 162.5 pence

The top fallers were:

Gasol (LON:GAS), down 8 percent at 0.62 pence at midday

Forum Energy (LON:FEP), down 6 percent at 49.25 pence

TXO (LON:TXO), down 6 percent at 0.673 pence

Sefton Resources (LON:SER), down 5.5 percent at 2.32 pence

Sirius Petroleum (LON:SRSP)
, down 5 percent at 4.62 pence

Quick facts: Brent Crude Oil

Price: - -

LSE:BRENT
Market: LSE
Market Cap: -
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