Bloomberg (10/120 -- Brent crude dropped after German industrial output unexpectedly fell, signaling an uneven recovery in Europe’s largest economy. The oil’s premium over West Texas Intermediate shrank for the fourth time in five days. Futures slid as much as 1.5 percent as the Economy Ministry in Berlin said production decreased 1.2 percent in October after a 0.7 percent decline the previous month. The Brent-WTI spread has narrowed by more than $5 in a week as U.S. crude inventories declined and TransCanada Corp. (TRP) said it expected to move oil in January to the Gulf Coast on the Keystone XL pipeline. “There has been optimism about both the American and European economies, but these German numbers are raising concern,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “The Brent-WTI issue has almost become the most important issue in the market.” Brent crude for January settlement decreased $1.40, or 1.3 percent, to $110.21 a barrel at 11:15 a.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures traded 2.2 percent above the 100-day average. WTI for January delivery gained 9 cents to $97.74 a barrel on the New York Mercantile Exchange. Volume was 33 percent below the average. Futures climbed to $97.65 on Dec. 6, the highest settlement since Oct. 29. The European benchmark traded at a $12.47 premium to WTI, heading for the narrowest close since Nov. 11. The spread tightened to $12.49 in intraday trading.
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