Oil prices fell on Thursday on the approaching restart of a North Sea oil field and weak U.S. jobless claims data, but with losses pared after news a pipeline carrying Canadian crude oil to the United States had shut.
U.S. crude futures ended near flat and Brent crude pared losses on news TransCanada Corp (TRP.TO) has shut down its 590,000-barrel per day (bpd) Keystone pipeline running from Alberta into the United States. The shutdown is expected to last for three days, the company said.
"The market is in a phase where there is a strong reaction to infrastructure issues, although refinery snags are of greater import given low refined product storage levels," said John Kilduff, partner at Again Capital LLC in New York.
"Still, if this crude oil pipeline issue does not clear quickly, we will see further gains," Kilduff added.
Oil prices felt pressure after a government report showed initial jobless claims rose last week, although some analysts noted that the four-week moving average was down from a month earlier.
Earlier, indications of improving supply weighed on crude, countering any support from data showing that China's third-quarter slowdown was not worse than analyst expectations.
The North Sea Buzzard oil field, Britain's largest, is scheduled to restart this weekend after maintenance, increasing supply of crude underpinning the Brent contract. U.S. crude stocks rose more than expected last week, the Energy Information Administration (EIA) said in a report on Wednesday.
Brent December crude fell 80 cents to settle at $112.42 a barrel. Prices recovered after falling to $111.57, below the 200-day moving average of $112.24, a technical level monitored by chart-watching traders and analysts.
U.S. November crude dipped 2 cents to settle at $92.10 a barrel. It reached $92.59 after dropping to $90.66, and below that, a test of technical support could be expected at the 100-day moving average of $89.92.
The U.S. November crude contract expires on October 22.
Total trading volumes were tepid, with turnover for Brent and U.S. crude under 30-day averages. U.S. crude dealings outpaced Brent's.
U.S. refined products futures were mixed, reflecting a switch in seasonal focus from summer driving demand to the approaching demand for heating fuel during the Northern hemisphere winter.
RBOB gasoline fell a sixth straight day, sliding 3.66 cents to settle at $2.7451 a gallon. Thursday's $2.7112 low trade was the weakest since early July.
Heating oil futures managed a 0.28 cent gain to $3.1866 a gallon.
CHINA'S SLOWING GROWTH
Crude futures had been supported early on Thursday by news that China's economy grew 7.4 percent in the third quarter from a year ago, in line with forecasts. Industrial production, retail sales and investment data were all slightly ahead of expectations.
China's growth rate slowed for a seventh straight quarter and missed the official 7.5 percent target, falling short of the official target for the first time since first-quarter 2009.
"The Chinese data was pretty neutral for the market," said Tony Machacek, an oil futures broker at Jefferies Bache in London. "If support around $113 to $112.50 gives way, we could fall quite a bit lower."
Adding to oil's bearish posture, Goldman Sachs, in a note to clients, cut its Brent price forecast for 2013 to $110 a barrel from $130. Goldman cited an increasing outlook for supply outside of the Organization of the Petroleum Exporting Countries.
The bank, which had previously given the highest oil price prediction among major forecasters, said it still expected the physical market to remain tight and maintained a near-term target of $120.
IRAN AND SYRIA
Oil prices continue to receive support from the potential for disruption of supplies from the Middle East, as market participants focus on Iran's dispute with the West over Tehran's nuclear program and fighting in Syria.
Iran is believed to be further increasing its uranium enrichment capacity at its Fordow plant buried deep underground, according to Western diplomats.
The international mediator on Syria will go to Damascus in the next few days to try to broker a brief ceasefire in the war between President Bashar al-Assad's government and rebels during the Islamic Eid al-Adha festival.