U.S. Crude Futures Rise More Than $1/bbl
NYMEX-traded crude futures advanced more than US$1 per barrel (/bbl) on Friday as Western relations with Russia worsened over the crisis in the Ukraine, and U.S. job growth accelerated by more-than-expected in an upbeat sign for oil demand. U.S. non-farm payrolls rose by 175,000 in February – surpassing analyst predictions for a 149,000 rise and above January and December levels, U.S. Labor Department data showed. Gains were capped; however, by news that China recorded its first domestic bond default, triggering worries that the world’s second-largest economy is slowing faster than expected. Meanwhile, Russia said any U.S. sanctions imposed against Moscow over the crisis in Ukraine would boomerang back on the United States, raising the financial stakes as the military stand-off intensified. In the second tense, high-level exchange between the former Cold War foes in 24 hours, Foreign Minister Sergei Lavrov warned U.S. Secretary of State John Kerry against “hasty and reckless steps” that could harm Russian-American relations. West Texas Intermediate (WTI) for April delivery rose to an intra-day high of $102.91/bbl, up $1.35, before pulling back to settle at $102.58/bbl, up $1.02. In spite of Friday’s price gains, U.S. crude ended lower for the first time in eight weeks. In European trading, Brent North Sea crude settled lower for the second straight week. The prompt-month April Brent finished up 90¢ at $109/bbl, narrowing its premium to WTI to $6.42/bbl from $6.54/bbl in the previous session.
Natural Gas Finishes Little Changed on Week
U.S. natural gas futures eased about 1% on Friday but were little changed for the week on forecasts for warmer weather and weaker heating demand over the next couple of weeks.
NYMEX-traded natural gas for April delivery closed down 4.4¢ at US$4.618 per million British thermal units. For the week, the front-month contract slipped just 0.2% after the previous week’s dramatic 24% plunge, which ranked as the largest weekly fall in 17 years. Gas futures are up 9% so far this year. For the week ended February 28, utilities pulled 152 billion cubic feet (Bcf) of natural gas from storage – exceeding the year-ago draw of 149 Bcf and the five-year average draw of 105 Bcf, according to U.S. Energy Information Administration data released March 6. Most analysts had forecast a draw of around 138 Bcf. Since the start of the heating season in November, utilities have withdrawn a record 2.638 trillion cubic feet (Tcf) of gas, leaving just 1.196 Tcf in storage. That is the lowest storage level for this time of year since 2004, Bloomberg data shows. Gas producers; however, speaking at the IHS CERAWeek energy conference in Houston last week expressed confidence in the industry’s ability to rebuild gas in storage. The number of rigs drilling for gas in North America rose by 10 to 345 in the week to March 7, according to oil-services firm Baker Hughes.
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