Crude Rises on Concerns About Russia Sanctions
NYMEX-traded crude oil futures marked their first climb in three sessions Friday – finding support from a weaker dollar – to finish with a gain for a week that was marked by speculation over the fallout from the Ukraine crisis and concerns about the potential for higher U.S. interest rates. Fresh U.S. and European sanctions on Russia also renewed fears of a supply disruption from the world’s second largest oil producer. The EU imposed sanctions against the Russian deputy prime minister, two aides to President Vladimir Putin and nine others ahead of the weekend, adding to the nearly two dozen prominent Russians Washington sanctioned on March 20 – including Gennady Timchenko, co-founder of oil trading firm Gunvor. On the first day as spot month, West Texas Intermediate (WTI) for May delivery settled up 56 cents at $99.46 per barrel (/bbl). London-traded Brent North Sea crude logged its fourth weekly loss in a row. A seasonal slump in demand has led to a near 5% price slide since early March, when Brent briefly jumped to a three-month high above $112/bbl as Russia took control of Ukraine’s Crimea region.
Prompt-month May Brent rose 47 cents to close at $106.92/bbl, narrowing Brent’s premium to WTI to $7.46/bbl from $7.55/bbl in the previous session.
Natural Gas Futures Score 2.5% Loss on Week
U.S. benchmark natural gas futures finished the week on a low note, slipping 1.3% on Friday and 2.5% for the week on milder weather that should reduce utility demand. NYMEX-traded natural gas for April delivery erased 5.6 cents to settle at US$4.313 per million British thermal units (/MMBtu) – the lowest in two months. The April contract, which traded just below the 100-day moving average, hit a new low each day last week. The contract oscillated within a 10-cent range ahead of the weekend, and Friday’s loss pared the gas contract’s 2014 gain to just 2% from a 50% gain seen a month ago. Most weather outlooks call for modest cold in the South and East over the next five days, before temperatures over much of the country turn milder for the next six to 15 days. As heating demand diminishes, electric generation will play a bigger role in natural gas consumption and storage levels, according to market observers. Elsewhere, early estimates show analysts expect utilities will pull between 36 and 76 billion cubic feet (Bcf) from storage in the week to March 21, with an early average of 57 Bcf. That compares with a withdrawal of 90 Bcf during the same week last year and a five-year average draw of just 7 Bcf.
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