NYMEX December crude futures settled $1.23 higher at $99.37/barrel Tuesday, buoyed by a rise in equities and bargain-hunter buying in RBOB despite continued eurozone debt concerns.
December RBOB settled 5.04 cents higher at $2.5857/gal and December heating oil settled 91 points higher at $3.1713/gal.
Energy analyst Tim Evans of Citi Futures Perspective said buyers sought RBOB futures ahead of weekly US inventory reports, due out late Tuesday and early Wednesday, that are expected to show a decline in gasoline stocks for the week ending November 11.
ICE December Brent settled at $112.39/b, up 50 cents, on its day of expiration.
The price action took the Brent/WTI spread to its lowest level in six months at $13.02/b, from a previous settle of $13.75/b on Monday. The last time WTI was at a premium to Brent was on August 16, 2010.
Dennis Gartman of the Gartman Letter said the end of hostilities in Libya and the notion of high quality Libyan crude being re-introduced into the market weighed heavily on the Brent/WTI spread.
"It will narrow farther for we get the sense that hedge funds and speculators are still heavily long of Brent/short of WTI after many months of the former's strength compared to the latter," Gartman said.
December crude dipped to a session low of $97.51/b in overnight trade after Italian 10-year bond yields rose back above the key 7% level as initial optimism over a new government faded, noted analyst Addison Armstrong of Tradition Energy.
"Traders are also eyeing Spain as a next bailout target, with Spanish bond yields above 6% again," he said.
Economic data was mixed with favorable US retail sales, which rose 0.5% in October after a 1.1% increase in September, and upward revisions to German and French third quarter GDP tempered by flat EU third quarter GDP and a drop in German investor confidence to a three-year low.
US equities were marginally higher and the US Dollar Index on ICE was up about 30 points by the NYMEX close. The euro was down 85 points at $1.3547.
