Oil Rises Amid Norway Strike

Brent oil futures jumped 2 percent to top $93 a barrel Tuesday, widening the premium against U.S. crude as a growing strike by oil workers in Norway tightened North Sea supplies.

Norway's Statoil said it was shutting down four oil more platforms in the North Sea producing region due to the strike, which began on Sunday and has cut output from the world's eighth biggest crude exporter by 150,000 barrels per day.

The disruption helped pushed out international benchmark Brent futures premium to U.S. crude by more than $1.80 to $13.66 in late trade, the widest level since mid-June.

In London, Brent crude for August delivery rose $2.01 to settle at $93.02 a barrel. Trading picked up considerably late in the session, pushing up Brent to a session high of $93.17, highest since June 20.

"Brent crude is up due to the ongoing strike by Norwegian oil workers that has shut some production," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

U.S. August crude settled up 15 cents at $79.36, after being down most of the session, having fallen to a low of $78.36 early, then gaining in late trade as U.S. stocks rose.

Brent's strength rubbed off on U.S. heating oil futures, with the front-month July contract rallying to close up 1.5 percent at $2.5765 a gallon.

"A more expensive Brent for a weak EU is going to mean it is cheaper to import distillates from the U.S. rather than trying to make it there," said Carl Larry, president of Oil Outlooks LLC in New York.

Trading volumes were light, reflecting caution ahead of the EU summit that begins on Thursday. Brent volume outpaced U.S. crude's and was up about 6 percent from its 30-day average, according to Reuters data. U.S. crude volume was down 26 percent.


Persistent worries about the euro zone debt crisis and fading hopes that a summit of European Union leaders this week will find a lasting solution have weighed on prices this month.

The two-day EU summit begins on Thursday and savvy investors are cooling their heels ahead of the meeting before making bets. While many expect little firm action to resolve the euro zone crisis, any signal of more cooperation to ease the crisis may be seen as positive and spur buying of riskier assets such as oil, analysts said.

"It's difficult to become too bullish given the uncertainty still in Europe and the expiration of (U.S.) product futures later this week," said Tom Pawlicki, analyst at trading platform EOXLive.com.

Some support for crude on Tuesday also came from expectations weekly U.S. petroleum inventory reports will show a 500,000 barrel draw for the week to June 22, declining as imports slow. The American Petroleum Institute will release the first picture of inventories for the week late Tuesday, with the U.S. Energy Information Administration's report due out on Wednesday.

In early trade, rising tensions between Syria and Turkey helped lift oil futures. NATO member states condemned Syria for its shooting down of a Turkish military jet last week and Ankara warned Damascus against any further military moves.