NEW YORK ( TheStreet) -- The premium of Brent oil prices over the U.S.-pegged contract strengthened Thursday as traders flocked to the international-benchmark amid supply concerns.
Brent crude oil for November delivery popped 51 cents to $111.84 a barrel while the U.S.-pegged West Texas Intermediate (WTI) light sweet crude oil for October delivery settled 43 cents lower to $86.02. While both had plummeted into negative territory on a basket of bad economic news, only the Brent contract managed to rebound back to positive territory on North Sea and Libya supply issues. The WTI managed to pare some losses after plunging on news that the U.S. service industry saw improvement in August, according to the nonmanufacturing index from the Institute for Supply Management. This, however, was overshadowed by a spate of discouraging economic news, including the lingering impact of Friday's bad jobs report, which showed no growth for August, and a lawsuit against big banks such as Bank of America ( BAC), JPMorgan Chase ( JPM) and Citigroup ( C) for damages related to the housing crisis. While the U.S. markets were on holiday Monday for Labor Day, it was reported that the China HSBC August Services Purchasing Managers Index fell to a record-low of 50.6 in August from 53.5 in July, reflecting the impact of the country's property and credit-tightening measures. Concurrently, the Euro-zone Composite Purchasing Managers Index came in short of expectations with a reading of 50.7 in August, while the Euro-zone Investor Confidence Index dropped to -15.4, the lowest since Sept. 2009, from -13.5. German industrial orders fell further than expected in July, down 2.8% from the previous month. The weak data arrived amid fears that the European Financial Stability Facility would be derailed and that the Eurozone debt crisis could develop into a banking crisis that would hurt both Europe and the global economy. Brent crude oil reached a record-high premium of more than $27 a barrel over the WTI during the trading session as more money managers put their money into Brent as either a safe-haven or commodities play. This international benchmark for crude oil prices is expected to continue to receive robust support from ongoing unavailability of 1.6 million barrels a day of oil because of the conflict in Libya, where a resolution seems close but is not quite there just yet. Meanwhile, North Sea production disruptions have led to 15 cargoes being delayed. Natural gas for October delivery ticked 6.6 cents higher to settle at $3.938 per million British thermal units on reports of more storm disturbances in the oil and gas-producing areas of the Gulf of Mexico. The "news of a brand new disturbance in the Gulf may keep the 40% of Gulf production offline," Summit Energy analyst Eric Bickel said in a morning note. "For the record, that's about 3% of total U.S. gas production." However, expectations of a "rather bulky" storage report next week kept a ceiling on further gains. Oil and gas stocks traded mixed. Chesapeake Energy ( CHK) fell 3.7% to $30.91; EOG Resources ( EOG) lost 1.5% to $87.03; Southern Union Company ( SUG) was flat at $41.57; Alon USA Energy ( ALJ) gained 2% to $8.91; Tesoro ( TSO) advanced 1.3% to $23.39; and Valero Energy ( VLO) tumbled 1.2% to $21.67. Also Sunoco ( SUN) rose 5.3% to $38.02 after the company Tuesday announced plans to exit its refining business and record a pretax charge of between $1.9 billion and $2.2 billion in the third quarter. -- Written by Andrea Tse in New York. >To contact the writer of this article, click here: Andrea Tse.