WSJ:Crude Oil Slips in Asia as Supply Worries Ease
By Arpan Mukherjee
Crude oil futures slipped in the Asian session Tuesday as supply worries due to a pipeline shutdown by Canada ease.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August last traded at $94.88 a barrel, down 30 cents in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell 29 cents to $100.87 a barrel.
Crude oil prices rebounded Monday after Canadian pipeline operator Enbridge Inc. said it had shut down and isolated a pipeline north of Cheecham, Alberta, after detecting a spill of some 750 barrels of crude oil. Canada accounted for about 28% of crude-oil imports in the week ended June 14.
Late Monday, the company said it had restored service to one of the three major pipelines it had shut down and was still working to repair and return to service a 100,000 barrel per day line.
Oil trading advisory firm Ritterbusch & Associates expects August Nymex crude to trade between $92.70/bbl and $96.50/bbl for the rest of the week as "the market attempts to price in Canadian crude supply disruptions and a confluence of international macroeconomic items."
Weak demand in Asia and an ongoing credit crunch in China are expected keep crude prices in a tight range though technical indicators suggest an improving scenario, said Mark To, head of research with Wing Fung Financial Group.
Recent China data came in below market expectations, suggesting an "obvious downtrend" in demand, he noted. Mr. To expects the ongoing credit crunch in China to persist, with the government signaling it's unlikely to intervene to ease the situation.
"Despite the weak fundamental picture, crude prices managed to rebound on Monday, which shows they are technically strong," Mr. To said.
Oil product futures were last mixed.
Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract-- fell 76 points to $2.7300 a gallon, while July heating oil traded at $2.8485, 62 points lower.
ICE gasoil for July changed hands at $863 a metric ton, up $6.25 from Monday's settlement.
Chester Dawson contributed to this report.
Write to Arpan Mukherjee at arpan.mukherjee@wsj.com
