Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Oil falls as warmer U.S. weather curbs demand

Send a link to a friend  Share

[February 22, 2014]  By Elizabeth Dilts

NEW YORK (Reuters) — Oil prices fell on Friday, slightly eroding their sixth straight week of gains, as the fierce U.S. winter weather that has supported heating fuel demand gave way to milder temperatures, triggering a selloff in heating oil.

Temperatures in the U.S. Northeast climbed into the 50s degrees Fahrenheit range (above 10 degrees Celsius) after a multi month cold snap reduced stockpiles of heating oil to the lowest level in a decade.

New York ultra low sulfur diesel, or heating oil, futures fell by more than 2 percent, or around 8 cents, to $3.0992 per gallon.

"The markets pushed higher this week on the expectation of increased fuel demands," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "But the market was overextended and people rushed to take profits."

Domestic conflicts in Libya and South Sudan, as well as escalating protests in Venezuela supported Brent earlier in the week, but by Friday traders had priced in the supply risk, analysts said.


Brent crude futures for April fell 45 cents to settle at $109.85 a barrel, having hit a seven-week high of $110.82 on Wednesday.

Brent was also weighed on by signs that Iran increased January crude oil exports to China and India.

U.S. crude futures for April delivery fell 55 cents to $102.20 after paring losses of more than $1 hit earlier in the session. The U.S. benchmark rose for the sixth straight week.

Losses were limited by rallies on global equity markets, which were up most of the day on Friday despite new data that showed U.S. home resales fell to an 18-month low.

Money managers raised their net long U.S. crude futures and options positions to the highest on record in the week to Feb. 18, U.S. Commodity Futures Trading Commission data showed on Friday.

[to top of second column]

Brent's premium to U.S. crude <CL-LCO1=R> settled at $7.65 a barrel. It narrowed Thursday to as tight as $7.09, the lowest point since Oct. 9, on a new pipeline that has drained supplies from WTI's delivery point at Cushing, Oklahoma.

Crude oil supplies from several countries face constraints.

South Sudan's oil output has fallen by about a third to around 170,000 barrels per day (bpd) as the capital of the main oil-producing region has been divided by the army and rebel fighters.

Maintenance at Angola's Plutonio oilfield in March will also cut supply by about 180,000 bpd.

Libya's oil output is just less than a quarter of its pre-Arab Spring levels, languishing below 400,000 bpd.

(Additional reporting by David Sheppard and Christopher Johnson in London and Florence Tan in Singapore; editing by David Evans, Dale Hudson, Chris Reese, Marguerita Choy and Peter Galloway)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 

< Recent articles

Back to top