Crude Futures Fall as Crimea Threat Eases
NYMEX-traded crude futures closed lower on Monday, relinquishing most of their gains from the previous two trading sessions, as ample global supplies outweighed concerns over continued tensions between Russia and the West over the fate of Crimea. The United States and Europe imposed sanctions on Russian officials after Crimea’s Sunday vote to become part of Russia. The sanctions target individuals and do not impact broad trade or financial measures, leaving oil supplies from the second largest producer in the world so far uninterrupted. West Texas Intermediate (WTI) for April delivery tumbled as much as $1.52 to a session low of US$97.37 per barrel (/bbl), before finishing down 81 cents at $98.08/bbl. Across the Atlantic, Brent North Sea crude plunged $2.05 at one point – their lowest level since February 6 – as investors downplayed the likelihood of global crude supply disruptions in the wake of Crimea’s vote to leave Ukraine and join Russia. Elsewhere, Libyan oil production fell to less than 250,000 barrels per day after the El Sharara oil field stopped pumping because of a new protest – reinforcing traders’ expectations the instability there would be protracted. Prompt-month April Brent closed down $1.97 at $106.24/bbl, and Brent’s premium over WTI ended at $8.16/bbl. On March 5, the Brent-WTI spread narrowed to $5.44/bbl, its tightest point in nearly five months.

Natural Gas Advances 2.5% on Heating Demand
U.S. benchmark natural gas futures settled 2.5% higher on Monday on forecasts for a return of cold weather and stronger heating demand over the next couple weeks. Traders said a “substantially colder outlook” for the balance of March has lifted domestic natural gas prices.
NYMEX-traded natural gas for April delivery closed up 11.1 cents at US$4.536 per million British thermal units (/mmBtu), after trading in a range between $4.48/mmBtu and $4.59/mmBtu. The contract lost more than 4% in the week to March 14. Investors noted that the session high was above the 14-day moving average. With Monday’s gains, the front-month contract is up 7% since the start of year. Most forecasts call for more cold weather from the Great Plains to the Northeast over the next six to 10 days, and continued cold over the Northern Plains and Great Lakes over the next 11 to 15 days. Utilities pulled between 53 billion cubic feet (Bcf) and 100 Bcf of gas from storage last week, with an early average of 70 Bcf, which is in line with the 74-Bcf draw a year ago and well above the five-year average for that week of 30 Bcf. Utilities have withdrawn a record 2.833 trillion cubic feet (Tcf) of gas from storage since the start of the heating season in November, leaving just 1.001 Tcf in storage – the lowest storage level since 2003, according to data from the U.S. Energy Information Administration.