U.S. crude oil futures rose nearly $2 on Tuesday, narrowing their discount to European Brent as traders expected data to show supplies were draining from the contract’s benchmark delivery point.
Market perception that the gradual start-up of TransCanada Corp’s Keystone pipeline would transport supplies from oil hub Cushing, Oklahoma, where the U.S. crude oil contract is priced, to the Gulf Coast supported prices.
A lack of pipelines has kept U.S. prices depressed relative to Brent oil for the last three years. Brent oil also rose but not as high, reversing Monday losses spurred by concerns over turmoil in emerging markets and a perceived economic slowdown in China.
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