U.S. Crude Falls Below $75


"Brent is acting as a much better benchmark for global fundamentals at the moment"

Oil prices were mixed Thursday, with the benchmark U.S. crude contract pressured below $75 a barrel by record stockpiles in the U.S. Midwest, while London-Brent crude held above $81.

The two-main benchmark contracts have diverged significantly over the past week. Rising global energy demand and hopes Europe's debt crisis can be tackled have seen Brent rise for four straight days, while U.S. crude prices have been falling since Tuesday.

Stockpiles of crude at Cushing, Oklahoma have risen for the last eight weeks to stand at a record 37 million barrels, pushing U.S. crude to its steepest discount to Brent since the peak of the economic crisis.

At 1022 GMT (6:22 a.m. EDT) on Thursday, U.S. crude oil for delivery in June was trading down 71 cents at $74.94/barrel, while Brent was trading up 1 cent at $81.21.

"In general, Brent is acting as a much better benchmark for global fundamentals at the moment," Barclays Capital analyst Amrita Sen said.

The EIA said total gasoline demand in the United States, which accounts for more than one in ten barrels of global consumption, is up by 2.7% on the same four-week period last year.

Gasoline inventories in the United States declined by 2.8 million barrels last week, the EIA said on Wednesday, though total U.S. crude inventories were up by 1.9 million barrels.

"It's mid-term expectations that have kept prices in a range between $75 and $85," said Ken Hasegawa, a commodity derivatives manager at brokerage Newedge in Japan.

The U.S. crude contract for delivery in July is trading almost trading $5 above the current contract, with the premium between the two touching its highest level since February 2009.

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