West Texas Intermediate crude declined after it added more than $1 on Tuesday amid expectations government data due later today may show a ninth straight build in US crude oil inventories. Easing tensions in Ukraine after a statement by President Vladimir Putin, also helped push prices down. Meanwhile, natural gas futures advanced as weather forecasting models called for much-below-normal temperatures in many densely-populated US areas, stoking demand for the power-station fuel.
On the New York Mercantile Exchange, WTI crude for delivery in May traded at $98.79 per barrel at 13:18 GMT, down 0.1% on the day. Prices shifted in a daily range between $99.20 and $98.39 a barrel. The contract surged 1.3% on Tuesday and closed the session at $98.88, the highest in 2-1/2 weeks. Prices are almost unchanged this week.
Meanwhile on the ICE, Brent futures for settlement in the same month stood at $106.01 a barrel at 13:12 GMT, down 0.74% on the day, having shifted in a daily range between $106.87 and $105.90 a barrel. The European benchmark added 0.5% on Tuesday and settled at $106.79. Brent traded at a premium of $8.16 to its US counterpart, up from $7.91 on Tuesday, based on closing prices.
Prices were pressured after the industry-funded American Petroleum Institute reported that nationwide US crude inventories rose by 5.92 million barrels last week, more than double from what analysts surveyed by Reuters had expected. Government data due later today is expected to show a 2.6-million-barrel build.
The API also reported that distillate fuel inventories fell by 0.674 million barrels last week, trailing analysts’ forecasts for a 0.9-million drop, while motor gasoline supplies declined by 1.410 million barrels, compared to predictions for a 1.6-million decrease.
Meanwhile, on the New York Mercantile Exchange, natural gas for delivery in April traded at $4.489 per million British thermal units at 12.25 GMT, up 0.73% on the day. Prices held in a daily range between $4.503 and $4.445 per mBtu. The contract fell to a seven-week low of $4.341 on March 14 and settled last week 4.4% lower.
NatGasWeather.com reported today that unseasonably strong natural gas and heating demand can be expected during the next few days, as a cold front will lead to temperature anomalies of 15-30 °F colder-than-normal across many US regions.
Total gas held in US underground storage hubs fell to a 10-year seasonal low of 1.001 trillion cubic feet in the seven days through March 7th. US gas stockpiles were 48.9% below last year’s amount of 1.959 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 46.2%, up from 38.8% a week earlier.
The EIA is scheduled to release its weekly US gas storage report at 14:30 GMT tomorrow.