U.S. Crude Tops $100/bbl on Fed Comments
NYMEX-traded crude futures climbed on Wednesday to close back above US$100 per (/bbl) as traders assessed comments from the Federal Reserve on monetary policy and the U.S. economy. Traders also weighed weekly data showing a significant build in domestic crude supplies and a drop in refined-product inventories. Oil prices continued higher heading into the NYMEX close as investors factored in the Fed’s decision to continue tapering its bond-buying stimulus program as expected. But the central bank also shifted the factors that could prompt the first rate hike since 2006. In a Wednesday press conference, Chairwoman Janet Yellen said the Fed “got a bit carried away by optimism about the economy in January.” West Texas Intermediate (WTI) for April delivery finished up 67 cents at $100.37/bbl. Across the Atlantic, Brent crude oil futures trended lower on renewed concerns about China’s economy. Zhejiang Xingrung Real Estate, a provincial Chinese developer, collapsed this week – unable to repay nearly $600 million in loans, according to the Wall Street Journal. Prompt-month April Brent retreated 94 cents to settle at $105.85/bbl, narrowing its premium to WTI to $5.48/bbl, from $7.09/bbl a day earlier.

Natural Gas Edges Higher on Cold Weather
U.S. benchmark natural gas posted modest gains on Wednesday as the market drew strength from a late-winter cold forecast and a decade-low supply of gas in storage. NYMEX-traded natural gas for April delivery tacked on 2.8 cents to close at US$4.484 per million British thermal units (/MMBtu). The April contract touched $4.50/MMBtu in early trade, slid to $4.42/MMBtu, then rebounded – leaving the contract up 6% since the start of the year. Most forecasts call for mild weather over much of the United States over the next five days, with “impressive late season cold” returning over the next six to 10 days in the eastern two-thirds of the country and less cold over the next 11 to 15 days. Meanwhile, analysts forecast utilities pulled about 59 billion cubic feet (Bcf) of gas from storage last week – below last year’s draw of 74 Bcf, but 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 Utilities have withdrawn a record 2.833 trillion cubic feet (Tcf) of gas from storage since the start of the heating season in November, leaving just 1.001 Tcf in storage, the lowest level since 2003, according to the U.S. Energy Information Administration.