US oil prices edged up on Tuesday on hopes the planned restart of country's main gasoline pipeline after a leak more than a week ago will boost demand, while Brent slipped amid skepticism over a proposed deal to freeze production. Both benchmarks hit six-week lows earlier on the day in volatile trade ahead of the Sept. 26-28 informal talks in Algeria between the Organisation of the Petroleum Exporting Countries and other producers on a proposed deal to contain a glut that has weighed on prices for about two years.
Brent futures closed down 7 cents at $45.88 per barrel. US West Texas Intermediate (WTI) crude settled up 14 cents at $43.44 a barrel, and US gasoline futures fell 4 percent after Colonial Pipeline Co said it will restart its main gasoline line by Wednesday. Supplies of the fuel from the Gulf Coast to the East Coast have been disrupted since a leak was discovered on the 1.3 million barrel per day line on Sept. 9."It was really an odd market for oil today, with different drivers for the two crude benchmarks and gasoline," said a New York-based energy broker.
Opec Secretary-General Mohammed Barkindo said he expected the potential freeze deal between Opec and other producers to last one year, longer than previously thought. Price hawks like Venezuela said a deal could push up prices by $10-$15 a barrel.
Despite the upcoming talks in the Algerian capital, Opec's biggest exporters such as Saudi Arabia, Iran, Iraq, Nigeria and Libya have all raised or been trying to hike output in recent months. "It seems there are more barrels than ever coming to the market because of Opec and there should be no fundamental reason for prices to go up," said Scott Shelton, broker with ICAP in Durham, North Carolina. But prices have also swung from "buying on the dips" by investors worried about Opec production drops in the near future, Shelton said. "We have very little risk premium in the market now for any severe outage among these producers."
The American Petroleum Institute (API), a trade group, will release its inventory data for last week at 4:30 p.m. EDT (2030 GMT), ahead of the official US Energy Information Administration (EIA) report on Wednesday morning. Analysts polled by Reuters expect the EIA to announce that US crude stockpiles, already at record high levels for this time of year, likely rose 3.4 million barrels last week.