Oil prices were headed in different directions today as while US crude futures were on the rise, London Brent crude edged lower.
In addition to yesterday’s rally in equity markets that saw the Dow Jones index in the US post its biggest daily gain since March 2009, oil prices were supported by lingering concerns about the situation in Iran.
The UK yesterday decided to close its Iranian embassy after it was attacked by angry protesters, prompting more calls for further sanctions on the oil-rich Middle Eastern country that is suspected of developing a nuclear weapon.
Last month, France called on fellow EU members to impose a ban on Iranian oil imports.
Gains in US crude were curbed by yesterday’s downbeat US inventories report, which showed a massive 3.9 million barrel gain in crude stockpiles for the week to November 27, a sign that oil demand from the world’s largest energy consumer fell.
Analysts polled by Bloomberg expected oil inventories in the US to add just 50,000 barrels.
In the meantime, Goldman Sachs unveiled its oil prices forecasts for 2013, projecting that the gap between Brent crude and America’s benchmark West Texas Intermediate (WTI) will narrow to just US$4.
The investment bank has set its Brent forecast for the year at US$130 per barrel, while WTI is expected to trade at US$126.
Goldman noted the recent reversal of the Seaway pipeline from Cushing, Oklahoma, the main delivery point for NYMEX oil contracts, to refineries in the Gulf Coast to curb growth in the Cushing stockpiles, which the bank said will contribute to the reduction of the Brent-US crude gap.
US light, sweet crude for January delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 41 cents to US$100.77/barrel in morning trade in New York.
While US benchmark crude rose, January Brent crude dropped seven cents to US$110.44/barrel on the ICE Exchange this afternoon under pressure from lingering concerns over the European debt crisis.
Today’s top risers in the oil and gas sector were:
Gold Oil (LON:GOO), up 12 percent at 3.14 pence at midday
Frontera Resources (LON:FRR), up 8 percent at 1.32 pence
Faroe Petroleum (LON:FPM), up 1.5 percent at 156.39 pence
Gulf Keystone Petroleum (LON:GKP), up 1.5 percent at 173.88 pence
The top fallers were:
Xcite Energy (LON:XEL), down 17 percent at 93.04 pence at midday
Pantheon Resources (LON:PANR), down 10 percent at 9.1 pence
Woburn Energy (LON:WBN), down 7.5 percent at 1.5 pence
BowLeven (LON:BLVN), down 6.5 percent at 66.75 pence
Kea Petroleum (LON:KEA), down 4.5 percent at 4.05 pence