Thursday, December 26, 2013

Crude oil edges higher, gasoline, heating oil support

South Sudan cuts output, U.S. jobless claims fall
* Workers extend strike at two French refineries
* U.S. crude stockpiles rose last week, gasoline falls - API
* Coming up: U.S. EIA report, Friday 11 a.m. EST (Rewrites, adds analyst's quote, updates prices)
By Jeanine Prezioso
NEW YORK, (Reuters) - Crude oil futures edged higher on Thursday boosted by rising gasoline and ultra low-sulfur diesel prices, which soared to more than three-month highs after industry data earlier this week showed a steep decline in refined product inventories.
U.S. gasoline and ULSD, more commonly known as heating oil, futures both rose close to 1 percent as large French refineries remained offline due to strikes, while demand increases.
While U.S. crude stocks unexpectedly rose last week, refineries boosted output and distillate and gasoline stockpiles fell, a report from industry group the American Petroleum Institute said late on Tuesday, indicating strong demand for oil products, including exports.
"Seasonally, this is the time of year when gasoline and heating oil are in the middle of their rally," said Bill Baruch, senior market strategist at in Chicago.
Supply disruptions in Africa supported Brent while the rise in U.S. crude stockpiles capped gains in U.S. benchmark West Texas Intermediate.
Brent crude rose 9 cents to $111.99 a barrel by 12:21 p.m. EST (1721 GMT) after touching an intraday high of $112.12, the highest since Dec. 5.
U.S. crude was up 32 cents to $99.54. Both markets were shut for Christmas on Wednesday.
The spread between the two benchmarks has steadied around $12.50 per barrel for the last four sessions in thin holiday trade. It was last trading at $12.45 per barrel.
U.S. gasoline futures continued to rise, hitting $2.8398 per gallon, their highest level since Sept. 9, before easing to trade at $2.8393. ULSD futures traded to their highest level since Sept. 16 at $3.1040 per gallon. The contract last traded at $3.1010.
Traders will next look to the U.S. government's Energy Information Administration report to gauge supply and demand. The data is due on Dec. 27 at 11:00 a.m. EST, delayed from its usual Wednesday release by the Christmas holiday.
U.S. crude also drew support from jobs data showing the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly a month, a hopeful sign for the labor market in the world's top oil consumer.
In Europe, workers extended a strike over pay at two French refineries, while lifting action at a third plant. A majority of workers at the 247,000 barrel-per-day Gonfreville refinery, Total's largest in France, and at the 153,000-bpd La Mede refinery voted to extend their action, union officials said.
The strikes, in addition to poor refinery margins, have weighed on European crude demand, say analysts.
Supply outages in Africa are also in focus and added some geopolitical risk premium to prices. The government in South Sudan, which is threatened by civil war, has shut 45,000 bpd of production.
Export terminals remain closed in Libya, where output is around a tenth of the 1 million bpd it pumped in July. Tribal leaders will hold more talks on reopening ports in eastern Libya but the government will not negotiate with protesters blocking them, the prime minister said. (Reporting by Alex Lawler in London and Florence Tan in Singapore; Editing by Marguerita Choy)

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