West Texas Intermediate crude fell for a third day ahead of government data that is expected to show an eleventh consecutive weekly build-up in US crude oil inventories. The oil complex, and particularly Brent crude, was heavily pressured amid the possible reopening of eastern Libyan export terminals. Market players eyed upcoming US supply data, as well as factory orders. Meanwhile, natural gas futures rebounded from the weakest level since mid-January as milder weather in the US gave way to chilly temperatures, boosting demand for the power station fuel.
On the New York Mercantile Exchange, WTI crude for delivery in May traded at $99.33 per barrel at 13:41 GMT, down 0.41% on the day. Prices shifted in a daily range between $99.83 and $98.87 per barrel. The contract fell by 1.8% on Tuesday, the most since March 5th, and settled at $99.74 per barrel, the lowest since March 26th.
Meanwhile on the ICE, Brent futures for settlement in the same month stood at $104.63 per barrel, down 0.94% on the day, having varied between day’s high and low of $105.85 and $104.12 a barrel. The European crude benchmark lost 2% on Tuesday and settled at $105.62 a barrel, the lowest close since November 11th. Brent traded at a premium of $6.02 to its US counterpart from Tuesday’s close at $5.88.
Market players were now awaiting the release of government crude inventories data in the US, as well as factory orders.
The oil markets were heavily pressured yesterday after the announcement a rebel group has reached an agreement with the Libyan government to reopen vital eastern oil export terminals, spurring hopes for an end to the standoff, which has crippled the nation’s oil output, its main source of revenue. A senior rebel leader told Reuters that the reopening could come through within days.
Meanwhile, on the New York Mercantile Exchange, natural gas for delivery in May traded at $4.330 per million British thermal units at 13:42 GMT, up 1.26% on the day. Prices held in a daily range between $4.345, and $4.222 per mBtu, the weakest since January 19. The contract snapped two weeks of declines, as it added 4% last week, following a bullish government gas storage report.
Prices of the energy source drew support by short-term weather forecasts that called for below-normal temperatures in many US regions. While one spring storm moves out of the Great Lakes and Northeast early today, a new one will be spinning up over the central US with increasing showers and thunderstorms in the warm sector and some heavy snowfall into portions of the Midwest and Great Lakes, NatGasWeather.com reported on April 1.
After the storm retreats on Friday, cool conditions will set up through the weekend, before another surge of milder conditions returns back early next week.
There is an increasing probability that another fairly strong spring storm develops during the middle of next week, with the potential to bring some very chilly Canadian air and push as deep as the southern US.
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