Price of oil jumps 2% ahead of OPEC meeting
The Keystone pipeline is seen in this undated photo. (TransCanada Corp)
The Associated Press
Published Tuesday, December 3, 2013 4:36PM EST
NEW YORK -- The price of oil jumped more than 2 per cent Tuesday on the prospect of more oil flowing out of a key storage hub in the middle of the country.
TransCanada said the southern leg of its Keystone XL pipeline should be operational early next month. The pipeline would move oil out of Cushing, Okla., the physical delivery point for futures on U.S. benchmark oil, to Port Arthur, Texas. That should lead to greater demand for the oil, which is priced lower than the crudes imported into the Gulf region.
Benchmark U.S. crude for January delivery rose $2.22, or 2.4 per cent, to close at $96.04 a barrel on the New York Mercantile Exchange. That followed Monday's gain of $1.10 a barrel.
Investors are also looking to a meeting of the Organization of Petroleum Exporting Countries in Vienna on Wednesday for an update on production levels.
OPEC is expected to keep intact its daily output target of 30 million barrels a day, although the group may come under pressure to reduce production if some supply sources currently experiencing disruptions return to normal.
Markets will also be monitoring fresh information on U.S. stockpiles of crude oil and refined products.
Data for the week ending Nov. 29 is expected to show a decline of 1.25 million barrels in crude oil stocks and an increase of 2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
U.S. crude supplies have risen for 10 consecutive weeks, mostly due to increased domestic production. They stood at 391.4 million barrels on Nov. 22, 13.3 per cent above their five-year average.
The report from the Energy Department's Energy Information Administration will be out on Wednesday.
At the gas pump, the average price for a gallon of gasoline slipped a penny to $3.26. That's down 3 cents from a week ago and 13 cents cheaper than at this time last year.
Brent crude, a benchmark for international oils, rose $1.17 at $112.62 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
Wholesale gasoline added 5 cents to $2.72 a gallon.
Heating oil rose 2 cents to $3.07 a gallon.
- Natural gas fell 1 cent to $3.98 per 1,000 cubic feet.