Crude Retreats as Russia-Ukraine Fears Ease
NYMEX-traded crude oil futures fell nearly 2% on Tuesday on comments from President Vladimir Putin that eased concerns Russia would escalate its military intervention in Ukraine’s Crimea peninsula. Putin told reporters Russia reserved the “right” to intervene in the Ukraine crisis, but would only use force as a “last resort.” Putin’s statements raised investors’ hopes for a peaceful resolution with Ukraine. The crisis caused a sell-off in global equities on March 3 as traders worried the oil supply from Russia – the world’s second largest producer – could be interrupted or subject to sanctions. Coupled with reports that Russian troops engaged in military exercises near the Ukraine border were ordered to return to their bases, oil prices retreated from the five-month highs it reached on March 3. West Texas Intermediate (WTI) for April delivery ended $1.59 lower at US$103.33 per barrel (/bbl). Across the Atlantic, receding fears of a disruption in Russian crude supplies and easing geopolitical concerns pressured London-traded Brent oil futures. Prompt-month April Brent finished down $1.90 at $109.30/bbl, narrowing its premium to WTI to $5.97/bbl from $6.28/bbl a day earlier.

Natural Gas Posts Sharp Gains on Cold Outlook
U.S. natural gas futures settled nearly 4% higher on Tuesday, and the next-day contract hit a new five-year high, on cold-weather forecasts. Expectations for another above-average storage withdrawal also weighed on prices. NYMEX-traded natural gas finished up 17.5¢, or 3.9%, at US$4.667 per million British thermal units (/mmBtu), after trading in a range from $4.49/mmBtu and $4.68/mmBtu. In the cash market, next-day trade on the IntercontinentalExchange at Henry Hub – the benchmark U.S. supply point in Louisiana, surged $1.06 to near $7.92/mmBtu – the highest average since September 2008. Last week’s 25% loss in the front-month contract was the biggest since December 1996. Despite those losses, the prompt month is still up about 10% since the year began. Cold temperatures are expected to remain over the eastern half of the United States over the next 15 days. Elsewhere, early consensus estimates for the amount of gas utilities pulled from storage in the week to February 28 range from 119 billion cubic feet (Bcf) to 152 Bcf with an average of 137 Bcf, which is below the year-earlier draw of 149 Bcf and well above the five-year average draw of 105 Bcf.