U.S. Crude Oil Futures Reclaim $100/bbl
NYMEX-traded crude futures on Wednesday closed above the $100 per-barrel (/bbl) level for the first time in roughly two weeks, tracking gasoline prices, which scored their first gain in three sessions. A U.S. government report revealed a weekly drop in gasoline stockpiles that was nearly three times more than the market expected. The Energy Information Administration update also showed that demand for the fuel rose over the last four weeks. The news offset pressure from a hefty jump in crude inventories, since falling supplies and rising demand for gasoline indicate the likelihood of higher crude consumption to produce more of the fuel, according to market observers. West Texas Intermediate (WTI) for May delivery gained $1.07 to finish at $100.26/bbl. In European trading, Brent North Sea crude held steady, supported by supply outages in Libya and Nigeria and tensions over Russia’s annexation of Crimea. Prompt-month May Brent picked up 4 cents to settle at $107.03/bbl on the ICE Futures exchange. The spread between Brent and WTI narrowed by more than $1 to end at $6.77/bbl, from Tuesday’s close of $7.80/bbl, and in from a session-high of $8.03/bbl.
Natural Gas Ends Flat on Milder Forecasts
U.S. natural gas futures settled little changed on Wednesday on forecasts for milder weather over the next couple of weeks and signs of increased gas production. After the front-month contract rose 3% a day earlier, buying interest waned ahead of today’s weekly inventory report, according to market observers. Cash prices for gas also fell across most of the country with the most dramatic decline in the Northeast. NYMEX-traded natural gas for April delivery lost less than a penny to close at $4.40 per million British thermal units (/MMBtu). Traders noted that the front-month price dropped below the 100-day moving average of $4.406/MMBtu, and the 14-day moving average of $4.458/MMBtu was close to crossing below the 100-day moving average. The April contract, which expires at the end of floor trading today, traded between $4.35/MMBtu and $4.42/MMBtu. Meanwhile, analysts polled by Bloomberg expect utilities pulled about 54 billion cubic feet (Bcf) from storage in the week to March 21. 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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