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Brent Crude Rises From Five-Month Low on Libya as WTI Gap Widens

April 3 (Bloomberg) -- Brent crude rose from the lowest level in almost five months amid concern that talks between the Libyan government and rebels won’t restore oil exports. West Texas Intermediate’s discount to Brent widened.

The European benchmark gained as much as 0.6 percent. The rebels’ Executive Office for Barqa, representing the region of Cyrenaica, denied a report that the group will cede one of the four ports that have been under its control since July to the government in a few days. WTI traded below $100 as U.S. jobless claims rose more than forecast last week.

“Libya is right on Europe’s doorstep and it has more impact on Brent,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There are concerns about Libya’s ports and oil exports.”

Brent for May settlement gained 23 cents to $105.02 a barrel at 10:46 a.m. New York time on the London-based ICE Futures Europe exchange. Volume was 35 percent above the 100-day average. Prices fell to $104.79 yesterday, the lowest settlement since Nov. 7. The North Sea grade is used to price more than half the world’s oil, including exports from Libya.

WTI for May delivery declined 23 cents to $99.39 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 24 percent below the 100-day average.

WTI was at a discount of $5.63 to the European benchmark crude. The spread shrank to $5.17 yesterday, the narrowest level since October.

Zueitina Port

Al Hayat, a London-based Arabic newspaper, reported today that the rebels in eastern Libya have agreed to hand over the Zueitina oil port. It didn’t say where it got the information. Zueitina’s crude-loading capacity is 200,000 barrels a day, according to the state-run National Oil Corp.

The rebels said yesterday that a government delegation had agreed “in principle” to three demands that would allow the ports under the Barqa-region federalists’ control to reopen.

The report in Al Hayat “is not true,” Ali Al-Hasy, a spokesman for the Baraq group, said in a telephone interview. “We will first wait for the government to confirm the agreement reached yesterday with its representatives.”

Al Hayat reported that the other terminals under control of the Barqa group would be handed over after the government implements its side of the agreement.

WTI crude was little changed after dropping as much as 0.6 percent in intraday trading on a Labor Department report that applications for unemployment benefits in the U.S. increased to a five-week high of 326,000, exceeding the 319,000 median forecast of analysts surveyed by Bloomberg.

“The jobless claims are higher than expected and the report is bearish for the market,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The Libya news should be supportive for Brent. The Brent-WTI spread is widening again.”

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