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WTI Crude Falls From Six-Week High As Pipeline Is Shut

Published 04/02/2013, 03:40 AM
West Texas Intermediate crude slid from the highest close in six weeks, snapping its longest rally this year. Exxon Mobil Corp. (XOM) shut a pipeline that carries oil to the U.S. Gulf Coast.

Futures dropped as much as 0.8 percent after five days of gains through March 28 took last quarter’s advance to 5.9 percent. The Pegasus pipeline, shut March 29 after a leak in Arkansas, will need to be excavated as Exxon determines what caused the breach, a spokeswoman said. WTI prices surged last week as U.S. economic growth beat forecasts, sending U.S. equities to a record March 28.

“U.S. crude inventories are at a fairly high level right now, and the Pegasus pipeline shutdown will further increase pressure,” Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai, said in a phone interview. “Prices will stabilize or weaken in the longer term as demand declines gradually.”

WTI for May delivery slipped as much as 81 cents to $96.42 a barrel on the New York Mercantile Exchange and was at $96.55 at 7:53 a.m. in New York. It closed at $97.23 on March 28, the highest settlement since Feb. 14, capping the longest rally since Dec. 20.

Prices increased 3.8 percent last week and 5.6 percent in March. The market was closed March 29 for Good Friday. The volume of all futures traded was 22 percent below the 100-day average for the time of day.
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