Brent/WTI spread widens

September 8, 2015 12:24 PM

Brent crude futures jumped 4% on Tuesday as strong stock markets helped the global oil benchmark recover substantially from a 6% tumble in the previous session.

WTI crude prices were weaker reopening from Monday's U.S. markets closure for the Labor Day holiday.

Stocks on Wall Street on Tuesday headed for a third straight day of gains in four, building on the euphoria in European equity markets after bullish second quarter euro zone growth and stellar German exports data.

London-traded Brent was up $1.80, or 3.8%, at $49.43 a barrel by 11:47 a.m. EDT. It rose more than $2 during the session to hit an intraday high of $49.72.

Brent's gains were capped earlier by China's mixed crude imports for August. The data showed a 6% gain year-on-year and 10% rise for the first eight months, but a 13% slide from July.

Also weighing on the market was the growing potential for Iran to flood the oil market with more supply as the Obama Administration gained further support to block Congress' disapproval of its aim to lift nuclear-related sanctions on Tehran crude exports.

"There are random factors at play," said Scott Shelton, commodities specialist with brokerage ICAP in Durham, North Carolina.

U.S. crude was down 5 cents at $46 a barrel. It had fallen almost $2 at one point.

U.S. crude was weighed by the closure of the largest crude distillation unit at ExxonMobil Corp's 502,500-barrels-per-day (bpd) Baton Rouge, Louisiana, refinery.

On Monday, Phillips 66 shut down a fluid catalytic cracker at its 314,000 barrel-per-day refinery in Wood River, Illinois. The gasoline-making unit is expected to restart within 48 hours, a source familiar with the plant's operations said.

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