Both West Texas Intermediate and Brent crude benchmarks regained ground on Monday, erasing earlier daily losses amid rising tension between the West and Russia ahead of diplomatic talks that are to determine the West’s reaction to Russia annexing Crimea. Meanwhile, natural gas futures declined for a third day.
On the New York Mercantile Exchange, WTI crude for delivery in May rose by 0.72% to $100.18 by 13:58 GMT. Prices held in a range between day’s high and low of $100.29, the strongest level since March 11, and $99.06 a barrel. Prices settled at $99.46 per barrel on Friday, closing the week 0.9% higher.
Meanwhile on the ICE, Brent futures for settlement in the same month traded at $107.30 per barrel, up 0.35% on the day. Prices varied in a daily range between $106.46 and $107.50 a barrel. The European crude benchmark rose to $106.92 on Friday but settled the week 1.2% lower, a fourth consecutive weekly decline. Brent traded at a premium of $7.40 to its US counterpart, down from Friday’s settlement at $7.46. Prices have fallen 3.8% in 2014.
The oil market was pressured early on Monday after a preliminary gauge of manufacturing activity in China showed a third straight monthly contraction in the sector. The HSBC Flash China Manufacturing PMI, prepared by HSBC and Markit Economics, fell to an eight-month low of 48.1 in March from February’s final reading of 48.5. The figure also fell short of analysts’ expectations for a jump to 48.7.
WTI rose back to positive weekly territory on Friday after President Vladimir Putin signed legislation needed to annex Crimea and its port of Sevastopol. This happened after Washington expanded its list of individuals to be sanctioned due to their close ties to President Vladimir Putin. Broadening of the sanctions to more than 20 prominent Russians marked an escalation of diplomatic pressure against President Putin for Moscow’s intervention in Ukraine.
Leaders of the G7 nations will hold talks on the sidelines of a nuclear summit in The Hague today regarding their response to Moscow’s latest actions. According to NATO, Russia had amassed a very sizeable force on its Ukrainian border.
Meanwhile, on the New York Mercantile Exchange, natural gas for delivery in April traded at $4.293 per million British thermal units at 14:00 GMT, down 0.1% on the day. Prices held in a daily range between $4.340 and $4.259 per mBtu. The contract registered a second weekly decline and settled last 5-day period 2.4% lower, after losing 4.4% in the previous week.
The Energy Information Administration reported on Thursday that US natural gas inventories fell by 48 billion cubic feet in the seven days through March 14th, less than analysts’ median forecast of a 58 million cubic feet drop and compared to a withdrawal of 74 billion cubic feet the same week a year ago. However, the decline exceeded the five-year average drop of 30 bcf during the comparable period.
Total gas held in US underground storage hubs fell to a 10-year seasonal low of 953 cubic feet. US gas stockpiles were 49.4% below last year’s amount of 1.885 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 47.9%, up from 46.2% a week earlier.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
