Crude Oil Falls on Weak Chinese Economic Data
NYMEX-traded crude futures trended lower on Tuesday, pressured by further signs of a Chinese economic slowdown, expectations that this week’s inventory data will show another build in domestic crude supplies and sinking gasoline futures. According to a report from the American Petroleum Institute (API) released late Tuesday, U.S. weekly crude stocks rose by a less-than-expected 822,000 barrels in the week ended February 21. A preliminary Bloomberg survey predicted a 1.2 million-barrel build. At Cushing, Okla., delivery – the benchmark delivery point for the U.S. oil futures contract – stocks fell by 1.1 million barrels, API data showed. Still, traders said that oil simply moved from one location to another along the Gulf Coast as refiners enter maintenance season and demand for crude oil wanes. Meanwhile, worries of sluggish growth in China worsened as the yuan fell more than 1% against the U.S. dollar. West Texas Intermediate (WTI) for April delivery finished down 99¢ at US$101.83 per barrel (/bbl). In European trading, persistent production outages in Libya and South Sudan capped losses in Brent. After hitting its highest level this year in the previous session, front-month April Brent settled down $1.13 at $109.51/bbl, narrowing Brent’s premium to WTI to $7.68/bbl, from $7.82/bbl a day earlier.

Natural Gas Logs Largest Two-Day Slide in 11 Years
U.S. natural gas futures suffered a loss of more than 6% on Tuesday, weighed down as traders look forward to the end of the winter heating-demand season. Trading was volatile ahead of the March futures contract expiration today. Tuesday’s decline followed an 11% drop on February 24 after the front-month contract touched a five-year high – marking the biggest two-day fall in 11 years and continuing a trend of large price swings this winter. Prices are now up 20% for the year after Arctic weather and record heating demand quickly depleted stocks – far below the 53% increase for the year seen at the high early on Monday. NYMEX-traded natural gas ended down 35¢, or 6.4%, at US$5.096 per million British thermal units (/mmBtu). The contract traded in a 70¢ range, from an early high of $5.492/mmBtu to a low of $4.788/mmBtu before pulling back to settle above $5/mmBtu as contract options expired. Monday’s $1.11 daily swing was the largest since August 2006, according to Bloomberg data. Unlike the March contract, April and the forward months advanced on Tuesday. Elsewhere, intense cold is forecast in the U.S. North-Central region over the next few days, and another brutal cold shot is seen over much of the country in the six- to 10-day outlook.