Crude Futures Extend Previous Gains
NYMEX-traded crude oil futures settled higher Thursday for a third straight day, but only after relinquishing nearly half of their gains on news that U.S. refiners were moving into their maintenance season. Citgo Petroleum Corp. initiated a shutdown at its Corpus Christi, Texas, refinery for planned maintenance that is expected to last about 35 days. West Texas Intermediate (WTI) for March delivery tumbled nearly 60¢ on the news. During a scheduled turnaround, a refiner typically buys little or no crude, so an oversupply could potentially result. In later trade, upside momentum seemed to come from upbeat U.S. economic data, advancing U.S. gasoline futures and severe cold in the Northeast. March WTI closed at US$97.84 per barrel (/bbl), up 46¢. In European trading, Brent crude trended higher, supported by a stronger euro, French port closures and tighter North Sea supplies. The euro reached a one-week high against the U.S. dollar in response to a European Central Bank announcement that it would leave its main interest rate unchanged. In France, a 24-hour strike blocked the oil hub of Fos-Lavera, disrupting supplies, and the four North Sea benchmark crudes that underpin the Brent oil futures contract expect to load fewer barrels in March, tightening inventories. Prompt-month March Brent ended 94¢ higher at $107.19/bbl, widening the negative trans-Atlantic arb to $9.35/bbl, from $8.87/bbl a day earlier.

Natural Gas Settles Lower on Supply Data
U.S. natural gas futures finished lower, extending their losses from the previous session in response to weekly government data showing a smaller-than-expected decline in domestic gas inventories. The U.S. Energy Information Administration (EIA) said supplies of natural gas stockpiles dropped by 262 billion cubic feet (Bcf) in the week ended January 31 – lagging analyst forecasts for a 275-Bcf drawdown. NYMEX-traded gas for March delivery erased 10¢, or 2%, to settle at US$4.931 per million British thermal units (/mmBtu). Some market observers described the natural gas market as being a “bit confused” – reacting to the lower storage withdrawal – while “nearly unprecedented tightness” is building in the North American market with risks that could create ripple effects over the next several months. Based on the most-active March contract, natural gas futures are up 0.3% so far this month. Prices ended January 18% higher as ultra-cold weather in the U.S. Northeast and other key-consuming areas of the nation increased demand for heating fuels. Most weather forecasts call for temperatures to be as much as 15° Fahrenheit below normal across the center of the country over the next five days before a warmer trend begins.