WTI Trades Near One-Month Low on China Data; Brent Premium Gains West Texas Intermediate traded near the lowest price since February after data showed slower growth in factory output in China, the world’s second-largest oil consumer. Brent’s premium to WTI widened. Futures were little changed in New York after falling the most since in two months yesterday. Chinese industrial production expanded by 8.6 percent in the January-February period from a year earlier, according to the National Bureau of Statistics. A 9.5 percent gain was forecast in a Bloomberg News survey of economists. The U.S. announced a test sale of oil from the Strategic Petroleum Reserve while the Energy Information Administration reported a 6.18 million-barrel increase in crude stockpiles, triple the median analyst estimate. “It’s not an improving picture with a very weak rating on industrial production,” Michael McCarthy, a chief market strategist at CMC Markets in Sydney, said by phone. “We could see oil under pressure over the remainder of this session.” WTI for April delivery was at $98.13 a barrel in electronic trading on the New York Mercantile Exchange, up 14 cents, at 4:55 p.m. Seoul time. The contract dropped 2 percent to $97.99 yesterday, the biggest decline since Jan. 2 and the lowest close since Feb. 6. The volume of all futures traded was about 2 percent above the 100-day average. Brent for April settlement was at $108.32 a barrel, up 30 cents on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $10.19 to WTI. The spread closed at $10.08 yesterday, the widest in six weeks. Chinese Economy WTI slid the past three days, the longest losing streak in more than two months, after data on March 8 showed a slump in China’s exports in February, bolstered speculation of an economic slowdown. In the U.S., the Energy Department said it’s offering 5 million barrels of crude in a test of the nation’s oil-distribution system. The sale of less than 1 percent of emergency reserves will be the first since August 1990 when 4 million barrels were released before the attack on Iraq. The Strategic Petroleum Reserve sale is probably a response to the crisis in Ukraine, according to Societe Generale SA. Russian government officials and businessmen are preparing for sanctions resembling those applied to Iran in a possible retaliation from the West for what they see as the inevitable annexation of Ukraine’s Crimea region, according to four people with knowledge of the preparations. “We don’t believe in coincidences,” Michael Wittner, the head of oil-market research at Societe Generale in New York, said in an e-mailed report. “We do believe that the SPR release is meant as a warning shot across Russia’s bow.” Weekly Stockpiles Commercially held U.S. crude stockpiles climbed for an eighth week to 370 million barrels in the seven days ended March 7, the highest level since Dec. 13, according to the EIA, the Energy Department’s statistical arm. “The inventory builds are pointing to an oversupply,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney. Crude supplies at Cushing, Oklahoma, the delivery point for WTI contracts, shrank by 1.34 million barrels to 30.8 million, a two-year low, the EIA said. Distillate stockpiles, including heating oil and diesel, decreased by 533,000 barrels while gasoline supplies slid by 5.23 million. WTI has technical support along its lower Bollinger Band, at about $96.25 a barrel, data compiled by Bloomberg show. Futures rebounded from this indicator in mid-January. Buy orders tend to be clustered around chart-support levels.
Posted on: Thu, 13 Mar 2014 08:05:20 +0000