Oil swings as outage on vital pipeline in U.S. adds to volatility
BNN Bloomberg
Oil snapped a four-day decline as an outage on a major crude pipeline linking Canada to the U.S. temporarily stalls worries about oversupply that had gripped markets in recent days.
West Texas Intermediate climbed as much as 4.8 per cent in New York, briefly surpassing US$75 after the Keystone oil pipeline, which can haul more than 600,000 barrels a day of crude from Canada into the U.S., was halted due to a leak into a creek. No timeline was given for its restart. Brent futures were slightly lower.
In a market grappling with poor liquidity and participation heading into year end, news of the outage has created even more volatility and could lead to big moves in both directions, traders said.
“Oil markets are exhausting,” said Ed Moya, senior market analyst at Oanda Corp. “The focus is all over the world for oil markets as energy traders track developments across Turkey’s Bosphorus strait as 19 oil tankers await passage and over the Keystone Pipeline getting shut after a leak. Oil was already getting close to the key US$70 level so this detected leak was immediately met with strong buying,” he added.
