WTI Slips 1.4% on Weak Chinese Data
NYMEX-traded crude oil futures settled more than 1% lower Monday after economic data released in China during the session cut into prospects for energy demand. Energy investors returned from the weekend to lackluster trade figures from China, underscoring concerns about slowing growth in the world’s second-largest consumer of oil. An unexpected 18% decline in Chinese exports in February from last year left a trade deficit of US$22.98 billion last month. The lack of support was evident throughout the entire energy complex as all nearby crude oil contracts fell more than US$1 per barrel (/bbl). The ongoing political conflict between Ukraine and Russia and tensions in Libya are keeping oil prices from even steeper declines, according to analysts. Traders, on the other hand, remain uncertain about long-term direction in the crude oil market, but are cautiously focusing on the potential to draw additional commercial and non-commercial buyers back into the market. West Texas Intermediate (WTI) for April delivery slipped $1.46, or 1.4%, to close at $101.12/bbl – the lowest level since February 14. The change erased Friday’s gain of 1%, which was supported by a better-than-expected increase in U.S. non-farm payrolls in February. In European trading, prompt-month April Brent oil futures fell 92¢, or 0.8%, to settle at $108.08/bbl. The European benchmark grade closed at a $6.96/bbl premium to WTI, up from $6.42/bbl in the previous session.
Natural Gas Futures Nudge Higher
U.S. natural gas futures garnered some support amid muted trading to start the week Monday in spite of forecasts predicting warmer weather in the U.S. as traders searched for bargains in the seesaw market. Demand for natural gas remains consistent even as the peak-heating season comes to a close and the chance for shortages lessens, according to market players. NYMEX-traded natural gas for April delivery rose 3.3¢ to close at US$4.651 per million British thermal units (/mmBtu). Indications of uncertainty in the market regarding warmer temperatures were juxtaposed by currently low-stock levels, which together contributed to futures fluctuating around the US$4.60/mmBtu level, according to industry sources. The latest storage levels for the heating fuel stood at just 1.196 trillion cubic feet – the lowest storage level since 2004, according to Bloomberg data, and roughly 39% below the five-year average for the week. Meanwhile, according to information released by the U.S. Energy Information Administration March 6, the latest stock withdraw for the week ended February 28 amounted to 152 billion cubic feet (Bcf), well over the five-year average draw of 105 Bcf.
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