Singapore: Oil prices rose in Asian trade on Thursday, after stockpiles declined at a key US trading hub. This indicated a stronger demand and a major pipeline expansion in the United States.
New York's main contract, West Texas Intermediate (WTI) for April delivery, rose by 38 cents to $100.75 in afternoon trade and Brent North Sea crude for May gained 30 cents to $106.15. The US Department of Energy (DoE) report showed supplies at the Cushing, Oklahoma trading hub fell by 200,000 barrels to 29.8 million. Inventories at Cushing are expected to further ease after a key pipeline expansion that will facilitate the distribution of supplies from the depot comes into operation in the next few months.
Enterprise Products Partners announced that it has decided to double the capacity of its Seaway Pipeline to about 850,000 barrels per day by May or June. "The potential expansion of a seaway pipeline willhelp to double its capacity to move oil,resulting in an increase of WTI prices," said Sanjeev Gupta, Head of the Asia Pacific oil and gas practice at Ernst & Young.
Brent crude is still being influenced by the crisis in Ukraine's Crimea peninsula. The pipeline expansion and the tensions in Crimea overshadowed remarks by the US Federal Reserve Chief, Janet Yellen hinting that the Central Bank could raise interest rates earlier than expected.
The Fed also decided at the end of a two-day policy meeting to further trim its stimulus programme by $10 billion to $55 billion month, as expected.
