Oil climbed from a six-month low in New York as Enbridge Inc. (ENB) and Enterprise Products Partners LP (EPD) prepared to reverse flows on their Seaway pipeline, easing a glut in the central U.S. West Texas Intermediate crude, the U.S. benchmark, rose as much as 1.2 percent on the day the switch to move barrels from Cushing, Oklahoma, to Texas is scheduled to occur. Brent oil in London fell to the lowest level since Jan. 3 after the European Central Bank suspended lending to some Greek firms, and some Spanish banks may be downgraded. “You’re seeing WTI react again to the reversal of the Seaway flow,� said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Brent is taking a hit because the demand picture in the euro-zone is worsening as we get more negative news from Europe.� Crude oil for June delivery advanced 27 cents, or 0.3 percent, to $93.08 at 11:01 a.m. on the New York Mercantile Exchange. Futures yesterday dropped 1.2 percent to $92.81, the lowest close since Nov. 2. Brent oil for July settlement slipped 70 cents, or 0.6 percent, to $109.05 a barrel on the London-based ICE Futures Europe exchange. The premium of the July Brent contract narrowed to a $15.64 premium to WTI in New York. Enbridge and Enterprise are scheduled to reverse Seaway today, according to an April filing with federal regulators. Increasing oil production in Canada and the U.S. Midwest and limited transportation out of Cushing, the delivery point for the New York contract, have bolstered supplies. “You’re seeing a slight narrowing of the Brent WTI spread because the opening of Seaway will relieve the glut at Cushing,� said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. U.S. Stockpiles The U.S. Energy Department reported yesterday that crude stockpiles climbed 2.13 million barrels to 381.6 million last week, the highest level since 1990. Supplies at Cushing increased 1 million barrels to 45.1 million in the week ended May 11, the highest level since the department began tracking inventories at the hub in 2004. Oil in New York has dropped 11 percent this month on the increase in supply and concerns that the European and U.S. economies will slow. “WTI is consolidating after one whale of a selloff,� said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “We dropped to $91.81 yesterday, which will be hard to break through.� Greek Lending Brent oil and equities dropped on concern that the European debt crisis will spread and the U.S. economy will slow. The ECB said it will temporarily stop lending to some Greek banks to limit its risk as President Mario Draghi signaled the central bank won’t compromise on key principles to keep Greece in the euro area. Moody’s Investors Service is set to downgrade the credit ratings of Spanish banks later today, two people with knowledge of the situation said. A statement on the downgrades is expected after 9 p.m. Madrid time, said the people, who asked not to be identified because the decision hasn’t been announced. A Moody’s spokeswoman declined to comment in a phone interview today. New York futures slipped from the day’s highs after the index of U.S. leading indicators unexpectedly fell and the Federal Reserve Bank of Philadelphia’s general economic index shrank, indicating the pace of economic expansion may cool. The Conference Board’s gauge of the outlook for the next three to six months decreased 0.1 percent in April after a 0.3 percent gain the prior month, the New York-based group said today. Economists projected the gauge would rise by 0.1 percent, according to the median of 49 estimates in a Bloomberg survey. “We’ve had some very big news today, but WTI has held on,� Armstrong said. “It will take a lot to get us to drop to new lows.� -- Editor: Margot Habiby To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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