Oil Prices Edge Up, Hold Near Three-Month Lows

Reuters

Brent crude prices rose on Thursday after a power outage shut production at Britain's largest oilfield and as the August contract approached expiration at the end of the session.

U.S. crude futures seesawed after giving up early gains and turning lower on data from industry intelligence firm Genscape showing more crude inventory gains at the Cushing, Oklahoma, hub, brokers and traders said.

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Brent August crude was up 71 cents at $57.76 a barrel at 11:56 a.m. EDT (1556 GMT), having reached $58.21.

September Brent crude was up 27 cents at $57.39.

August Brent moved to a premium to September , reaching 51 cents intraday, the highest for front-month Brent to the nearby month since June 2014, according to Reuters data.

U.S. August crude was down 2 cents at $51.39, having swung from $50.50 to $52.71.

"Another build at Cushing would be bearish for U.S. crude, and the Buzzard outage and contract expiration are supporting Brent," said Phil Flynn, analyst at Price Futures Group in Chicago.

Britain's Buzzard oilfield was closed after power supplies failed, traders said.

It normally pumps 170,000 to 180,000 barrels per day (bpd) but went down early on Thursday, traders said.

A spokeswoman for Buzzard operator Nexen, a unit of China's CNOOC, declined to comment.

Buzzard is the single biggest contributor to the Forties crude stream, one of four crude grades underpinning the price of over-the-counter Brent, which is linked to Brent futures.

Crude stocks at the Cushing, Oklahoma, delivery point for the U.S. crude contract have risen nearly 1 million barrels since last Friday, according Genscape data released on Thursday, trading sources said.

In the week up to last Friday, total U.S. crude inventories fell 4.3 million barrels but stocks at Cushing rose 438,000 barrels, according to the Energy Information Administration (EIA) data released on Wednesday.

Crude runs at U.S. refineries jumped 229,000 barrels per day last week to 16.83 million bpd, a record high according to EIA data, as refiners reacted to strong gasoline demand.

Olivier Jakob, head of Swiss energy consultancy Petromatrix, said U.S. oil demand, driven by gasoline consumption, remains strong and was helping keep U.S. refineries churning during the nation's summer driving season.

But Jakob cautioned that the market might not as well balanced when seasonal maintenance shuts some refineries.

"U.S. crude oil stocks are still at a high level and at risk of seeing increasing builds once refineries go into maintenance in the fall," Jakob said. (Additional reporting by Christopher Johnson in London Henning Gloystein in Singapore; Editing by David Clarke, Pravin Char, W Simon and Marguerita Choy)