Oil Rises on Seasonal Demand; Geopolitical Concerns
Crude oil futures rose on both sides of the Atlantic on Thursday, with NYMEX-traded crude up more than $1 per barrel (/bbl) to hit a three-week high as strong US economic data and the end of refinery maintenance season buoyed prospects for oil demand. The US economy grew a bit faster than previously estimated in the fourth quarter, data showed, while the number of Americans filing new claims for unemployment benefits unexpectedly fell last week – touching its lowest level in nearly four months. West Texas Intermediate (WTI) for May delivery advanced $1.02 to close at $101.28/bbl. The US benchmark is up nearly 2% for the week, and has risen in six of the last eight sessions. US crude’s gains gave a lift to Brent, which also drew support from worries that possible Western sanctions on Russia’s energy sector could disrupt global supplies. Prompt-month May Brent added 80 cents to finish at $107.83/bbl on the ICE Futures exchange. The spread between Brent and WTI narrowed to $6.55/bbl, from Wednesday’s close of $6.77/bbl.
Natural Gas Futures Rally 4% on Weekly Storage Data
U.S. natural gas futures closed up 4% in response to a weekly government update showing a slightly larger-than-expected storage draw. The U.S. Energy Information Administration said that utilities pulled 57 billion cubic feet (Bcf) of gas from storage in the week to March 21, surpassing analysts’ estimates for a 54-Bcf decline. Last week’s draw was below the 90 Bcf of a year earlier but well above the five-year average of 7 Bcf. NYMEX-traded natural gas for April delivery expired up 18.2 cents, or 4.1%, at $4.58 per million British thermal units (/MMBtu), after breaking resistance at $4.50/MMBtu in the final hour of trading. The contract established an intra-day and two-week high of $4.615/MMBtu, and went off the board up 8% since the start of the year. May futures, which become the front-month contract today, jumped 14.3 cents, or 3.2%, to settle at $4.538/MMBtu. Meanwhile, most weather forecasts call for cool weather in the central and eastern United States over the next five to 10 days, and warmer weather in the West and Midcontinent over the next 11 to 15 days.
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