Crude oil was down in Asia today as a pipeline closure in the US led to fears that inventories could rise and investors waited for the release of US payrolls data.
The market is also eyeing a policy meeting tomorrow of the European Central Bank (ECB), which is at the forefront of the fight to tackle the debt crisis in the Eurozone, analysts said.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in May, shed 57 cents to $96.62 a barrel and Brent North Sea crude for May delivery dropped 45 cents to $110.24.
“Uncertainty surrounding the impact of the ruptured pipeline has kept US light sweet crude prices volatile,” said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
ExxonMobil’s Pegasus pipeline in Arkansas, a 95,000 barrel-a-day line, has been down since an oil spill on Friday.
There are concerns the closure could lead to a build-up of stockpiles at the Cushing, Oklahoma, delivery point as crude oil cannot be pushed through to refineries. Such a build-up puts a downward pressure on prices.
“Traders have also been a little cautious this week ahead of a key (European) Central Bank meeting and the hugely influential (US) non-farm payrolls (due on Friday),” said a report from IG Markets Singapore.
Analysts expect the ECB to hold off from cutting rates or announcing any other policy moves to keep up pressure on governments to solve the crisis in the Eurozone.