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The gap between West Texas Intermediate and Brent narrowed to the least in almost two months as U.S. crude stockpiles were forecast to fall and Ukraine said peace talks with Russia yielded progress.
Futures rose as much as 0.5 percent in New York and Brent was steady in London. U.S. crude stockpiles probably shrank by 1.5 million barrels in the week ended June 6, according to a Bloomberg News survey before data from the Energy Information Administration tomorrow. Two days of talks with Russia led to an agreement to implement parts of President Petro Poroshenko’s peace plan, Ukraine’s Foreign Ministry said in a statement.
“U.S. oil stocks are now likely to fall every week until mid-August,” Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo, said by e-mail. “No one should be surprised that the WTI-Brent spread is tightening up.”
WTI for July delivery gained as much as 48 cents to $104.89 a barrel in electronic trading on the New York Mercantile Exchange and was at $104.73 at 12:47 p.m. London time. The contract climbed $1.75 to $104.41 yesterday, the highest close since March 3. The volume of all futures traded was about 46 percent above the 100-day average for the time of day. Prices have increased 6.5 percent this year.
Brent for July settlement was 18 cents higher at $110.17 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium dropped to as little as $5.15 to WTI on ICE, the least since April 15. It was at $5.49 a barrel at 12:47 p.m.
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