Oil Spill Supports U.S. Crude Futures
NYMEX-traded crude oil futures logged a minor gain on Monday as an oil spill caused the closure of one of the busiest seaports in the United States. Traders also continued to weigh the prospects for global crude-supply disruptions linked to Russia-Ukraine tensions, providing further support for oil prices, but weak economic data from China kept a cap on any gains. Nearly 170,000 gallons of fuel oil spilled into the Houston Ship Channel on March 22 after a collision between two vessels. In a press release issued March 23, Texas Gov. Rick Perry said state resources were directed to assist with the cleanup, and the channel was closed to traffic. Early Monday, the U.S. Coast Guard said it was working to determine when partial vessel traffic could resume. While a backlog of vessels blocked in the channel is a bullish factor for prices, refinery maintenance on the Gulf Coast has helped mitigate some of the impact, according to market observers. West Texas Intermediate (WTI) for May delivery tacked on 14 cents to settle at $99.60 per barrel (/bbl). London-traded Brent crude relinquished early gains, with the May contract slipping by 11 cents to end at $106.81/bbl on the ICE Futures exchange. Brent’s premium to WTI narrowed to $7.21/bbl from $7.46/bbl in the previous session.
Milder Weather Pressures Natural Gas
U.S. benchmark natural gas futures posted modest losses on milder weather that should reduce utility demand. NYMEX-traded natural gas for April delivery slipped 4 cents to settle at US$4.28 per million British thermal units (/MMBtu). The April contract, which traded just below the 100-day moving average, hit a new low each day last week. The U.S. Department of Energy on Monday conditionally authorized liquefied natural-gas exports from the Jordan Cove terminal in Coos Bay, Ore. More than 20 applications for LNG-export approvals still remain, according to the American Petroleum Institute. Meanwhile, 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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