Crude Oil Rises as Jobless Claims Falls; Natural Gas Rallies on Weak Inventory Data

Edited By Vani Rao

Natural gas inventory falls below five-year average owing to US harsh weather conditions and supply constraints.

Crude Oil

On Thursday, 6 March 2014, the US crude rose 11 cents to end at $101.56 a barrel on the New York Mercantile Exchange (NYMEX). The light, sweet crude prices rebounded after a 3.33% decline in the last two sessions, the biggest drop in the last two months.

Source: Bloomberg
Source: Bloomberg

The US Department of Labor announced on Thursday that unemployment benefits fell by 26,000 in the last week to 323,000, below the Bloomberg economist estimates of 325,000. The jobless claims have declined to the least since November 2014.

WTI fell on concerns of weak economic demand, boosting US crude oil stockpiles. On Thursday, 6 March 2014, the US Energy Information Administration (EIA) reported that US crude oil stockpiles have improved to 13.6 million barrels since January 10, after the four-week average demand fell to an eight-month low, as stated by EIA.

It further stated that the US, the world’s largest oil-consuming country, will consume 18.9 million barrels of crude oil per day this year.

On Thursday, 6 March 2014, Brent crude April futures on the London-based ICE Futures Europe exchange rose 34 cents, or 0.3%, to $108.10 a barrel. The crude oil spread between Brent and WTI crude narrowed to $6.31 a barrel, the lowest in the last five months.

Source: Bloomberg
Source: Bloomberg

The WTI and Brent crude were last trading at $101.92 and $18.45 a barrel, respectively, at the time of reporting.

Natural Gas

On Thursday, 6 March 2014, Natural Gas futures on the NYMEX gained more than 3% to settle the day at $4.662 per million British Thermal Units (BTU). Natural gas April futures declined more than 3% on Wednesday to settle at $4.523 per million BTU.

Source: Bloomberg
Source: Bloomberg

In its weekly report on Thursday, the EIA stated that the US natural gas stockpiles for the week ended February 28, 2014, declined 152 billion cubic feet, below the Bloomberg median estimate of 138 billion cubic feet.

Natural gas supplies for the same week fell by 149 billion cubic feet, which is significantly below the five-year average decline of 105 billion cubic feet. US total natural gas stockpiles stood at 1.1968 trillion cubic feet, the lowest since 2004, for this time of the year.

This winter season, the US has battled frigid climatic conditions, driving more gas consumption for heating purposes by households. Natural gas prices surged to $6.493 per million BTU on February 20, 2014, the highest in the last five years.

US Natural Gas was last trading at $4.640 per million BTU at the time of reporting.

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