Brent crude prices dropped Friday for the fourth session in a row due to global economic concerns as well as speculations that a major Canadian crude oil pipeline project to the United States would restart on schedule.
Investors were concerned about the lack of progress with regards to the Spanish bailout that dampened risk appetite. It sent equities and commodity markets lower and gave support to the US dollar. Oil prices turned negative in the early trading session in the United States following the release of the news that TransCanada Corp expected to restart the 590,000 barrel per day Keystone pipeline project to the US market over the weekend despite the bad weather that could hamper the efforts.
The pipeline was closed on Wednesday following the detection of an anomaly but analysts said that the US crude oil inventories were healthy and nothing to worry about. The market was able to absorb the temporary disruption with little problem. US crude stocks are still 11 percent over the price it had a year ago.
But crude oil prices were pressured by the report that showed US home resales went down in September after reaching a two year high. Oil markets shave been trying to stay afloat as the economy struggled and demand weakened against supply problems in the North Sea. These factors sent the Brent crude’s premium to US oil to $20 per barrel. Crude prices got an early lift after news of another delay in the restart of the North Sea Buzzard oilfield. According to officials, it is expected to restart on October 23 after a maintenance shutdown.
Brent December crude dropped $2.28 to$110.14 per barrel. The international benchmark got as high as $113.27, which is below the 50 day moving average of $113.33 before it went down to $110.05.