BUSINESS

Oil rises on pipeline expansion news; market ignores supply data, govt shutdown

10/02/2013 10:43 EDT | Updated 01/23/2014 06:58 EST
NEW YORK, N.Y. - The price of oil rose the most in two weeks Wednesday on the prospect of more oil being shipped between a key Midwest hub and the U.S. Gulf Coast.

Benchmark West Texas Intermediate crude for November delivery rose $2.06, or two per cent, to close at US$104.10 a barrel on the New York Mercantile Exchange.

Reports said that TransCanada Corp. (TSX:TRP) is close to completing work on the southern portion of its Keystone pipeline expansion. That could mean as much as 700,000 barrels a day moving out of Cushing, Okla., the pricing point for U.S. benchmark oil. The additional demand is seen as positive for oil prices.

The market shrugged off a report from the U.S. Energy Department showing bigger than expected increases in U.S. oil and gasoline supplies. It also ignored, at least for a day, the partial shutdown of the U.S. government.

Demand for oil in the U.S. could weaken if the shutdown curbs economic growth and continues to stop 800,000 federal workers from commuting. The workers were furloughed after U.S. lawmakers failed to agree on a budget measure to fund government operations after the fiscal year ended Monday.

Brent crude, a benchmark used to price imported crude used by many U.S. refineries, gained $1.25 to US$109.19 in London.

In other energy futures trading on Nymex, wholesale gasoline rose two cents to US$2.63 a U.S. gallon (3.79 litres), heating oil rose four cents to US$2.99 a gallon and natural gas dropped seven cents to US$3.54 per 1,000 cubic feet.

(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE)