Oil weekly recap, February 17 – February 21

West Texas Intermediate crude rose for a sixth straight week but fell on Friday, along with its European counterpart, as the cold US weather, which up to recently had supported the market, moderated and as weak housing data from the worlds top consumer raised additional concerns over demand prospects. Overall mixed inventories data released by the EIA on Thursday had a muted effect on prices. Reduced output from Libya, South Sudan and Angola, coupled with escalating tension in Venezuela earlier in the week provided some support.

On the New York Mercantile Exchange, WTI crude for delivery in April fell by 0.5% on Friday to $102.20 per barrel after it ranged between $101.69 and $102.92 per barrel. The US benchmark lost 0.1% on Thursday but settled the week 2.1% higher, a sixth straight weekly advance, the longest such streak in a year.

Meanwhile on the ICE, Brent futures for settlement in the same month fell by 0.4% to close at $109.85 a barrel, having ranged between a daily high and low of $109.35 and $110.50 per barrel. The European benchmark rose by 0.8% this week and traded at a premium of $7.65 to its US counterpart, up from $7.55 on Thursday, based on closing prices.

Oil retreated on Friday after colder-than-usual weather across the US, which had previously been stoking heating demand, gave way to milder temperatures. Readings in the US Northeast rose to as much as 50 degrees Fahrenheit, pushing down diesel futures by 3%.

The market was further pressured after data by the National Association of Realtors showed that purchases of previously owned homes in the US fell in January to the lowest in a year and a half. Sales fell to an annual rate of 4.62 million, underperforming expectations for a drop to 4.68 million from the previous periods 4.87 million. Month-on-month, existing home sales marked a 5.1% decline, trailing projections for a 4.3% decrease.

Another drop in inventories at Cushing, Oklahoma, the biggest US storage hub and delivery point for NYMEX-traded contracts, provided some support, but overall mixed data by the Energy Information Administration did not spur strong moves. The EIA reported that distillate stockpiles fell for a sixth week by 339 000 barrels last week to 112.7 million, trailing the median estimate of 10 analysts surveyed by Bloomberg for a 2.1-million decline, but remained well below the lower limit of the average range for this time of the year. Motor gasoline supplies rose by 0.3 million barrels, defying expectations for a drop of 850 000 barrels.

However, distillate fuel demand fell by 1.4% to 3.62 million barrels per day, the weakest since the seven days through January 3rd, while gasoline consumption plunged by 3.5% to a one-month low of 8.03 million bpd.

Supplies at Cushing, Oklahoma, the biggest US storage hub and delivery point for NYMEX-traded contracts, declined by 1.7 million barrels last week to 35.9 million, the lowest level since October, as the southern leg of TransCanada’s Keystone XL pipeline began delivering oil from the hub to the Gulf Coast in January. However, nationwide crude inventories increased by 973 000 barrels in the seven days through February 14th, despite outperforming analysts’ forecasts for a 2.25-million barrels build.

According to a Bloomberg survey of analysts, US crude may drop next week as inventories increase. Twenty-three of 28 participants in the poll, or 82%, forecast that futures will decrease through February 28th, while four were bullish, and one respondent predicted no change.

An overall weak dollar, which fell to a seven-week low against the euro earlier in the week, also proved to be supportive, but only to a limited extent as fundamental support was fading.

Tariq Zahir, an investment manager at Tyche Capital Advisors in New York, said, cited by CNBC: “I think people need more of a fundamental reason for crude to go higher even though the dollar is slightly weaker.”

The oil complex continued to draw support as protests in Venezuela against President Nicolas Maduro’s socialist government escalated on Thursday, putting at risk the OPEC member’s output rate.

Reduced output in Libya and South Sudan also kept the market underpinned. South Sudan cut its oil output to 170 000 barrels per day even before the rebel strike on Malakal, an official said for Reuters. Production in the neighboring Unity state was reduced by 45 000 bpd earlier in the conflict. Libyas nationwide output remained impaired below 400 000 barrels per day, while maintenance at Angolas Plutonio oilfield is expected to reduce supply by 180,000 bpd in March.