NEW YORK (Reuters) — Brent
crude oil futures rose on Thursday as sanctions against Russia
injected a new risk premium into the market and strong equities
provided support, while U.S. crude fell ahead of the April
contract's expiry.
The United States expanded sanctions to 20 more prominent Russians,
including allies of Russian President Vladimir Putin, in the latest
sign of mounting tensions over Moscow's annexation of Crimea. Russia
retaliated with its own sanctions against nine U.S. officials and
lawmakers.
U.S. equities, meanwhile, reversed Wednesday's slump to rise after
economic data showed stronger-than-expected factory growth. Markets
fell on Wednesday after the U.S. Federal Reserve said its stimulus
program would end and interest rates would rise sooner than
expected.
On Thursday, the Standard & Poor's 500 stock index was up 0.6
percent, and the Dow Jones industrial average rose 0.7 percent,
lifting Brent and crude oil products, gasoline and diesel, analysts
said.
"This is a relief rally in Brent, RBOB (gasoline) and diesel thanks
to the rebound in the S&P 500," said Walter Zimmermann, chief
technical analyst at United-ICAP. "The S&P is going higher because
there was an over-reaction to the Fed's remarks yesterday, and
that's giving relief to energy bulls."
Brent rose 60 cents to settle at $106.45 a barrel, after touching an
intra-session high of $106.75.
U.S. crude for May delivery, which will become the front-month
contract Friday, settled 27 cents lower at $98.90 per barrel, pulled
down by U.S. crude for April delivery, which settled 94 cents lower
at $99.43.
New York gasoline RBOB rose nearly 3 cents to settle at $2.8955 per
gallon. New York ultra-low sulfur diesel settled 2 cents higher at
$2.9213.
Gasoline inventories at Europe's Amsterdam-Rotterdam-Antwerp (ARA)
storage hub rose near-six-year highs last week, indicating ample
supply and exacerbating U.S. data that showed domestic crude
inventories rose sharply for the second week in a row.
Data on Thursday showed the number of initial U.S. jobless claims
rose by 5,000 last week.
Societe Generale cut its 2014 price forecast for crude oil on
Wednesday, saying prices have underperformed despite strong
fundamentals.
Societe Generale reduced price targets for Brent to $106 per barrel
from $108 and for U.S. crude to $96 per barrel from $99.
(Additional reporting by Robert Gibbons in New York, Peg Mackey and
Shadi Bushra in London, and Jacob Gronholt-Pedersen in Singapore;
editing by William Hardy, Chris Reese and Lisa Von Ahn)
