Verified by Joma Jose
Edited by Vani Rao
Battle in Libya and South Sudan and protests in Venezuela push up crude oil prices
The oil prices softened after two weak economic data releases on two consecutive days, snapping weekly gains.
On Friday, 21 February 2014, the US crude futures slipped for the second consecutive day during the week as the US reported weaker-than-expected housing data and promising prospects of the climatic getting better. On Thursday, 20 February 2014, the Federal Reserve Bank of Philadelphia reported a negative manufacturing index, which fell to 12-month low of -6.3. Meanwhile, the US existing home sales for January 2014 fell 5.1% on Friday’s economic data release, hitting an 18-month low and below the forecast levels.
WTI crude fell to a day’s low of $101.69 a barrel, before settling 0.54% lower at $102.20 a barrel.
Brent crude oil futures on the ICE Futures Exchange in London for April delivery fell 0.41% on Friday’s close of $109.85 a barrel.
During the week, the US crude future gained 2.02%, its sixth consecutive weekly gain, on speculation of a frigid climatic condition in the US. The introduction of the new pipeline in Cushing Oklahoma, has resulted in decline of the inventory by 1.73 million barrels, increasing the pressure on the commodity. The inventory level in Cushing is been currently below its 5 year average.
For the forthcoming week, all eyes will be on the fourth-quarter US economic data releases like durable goods orders and consumer confidence. The durable goods orders are likely to be weak due to extreme climatic conditions in January.
The political unrest in Libya and South Sudan and protests in Venezuela also the propelled the crude oil price to rise further. Brent crude prices gained 0.7% during the week on ICE Futures Exchange in London.
Many nations are facing crude oil constraints after South Sudan’s oil output fell about a third to around 170,000 barrels per day (bpd). Libya has been able to pump out only one-fourth of its total capacity after the civil war.
Crude oil prices have been easing out after China and India had substantially increased its import from Iran. The WTI and Brent crude were last trading at $102.50 and $110.10 per barrel, respectively, at the time of reporting.
US natural gas price rose on Friday, 21 February 2014, as households consumed above normal fuel to beat the frigid winter temperature. The March delivery for natural gas futures on NYMEX hit the day’s high of $6.308 per million British Thermal Units (BTU), before settling 1.17% for the day $6.135.
NYMEX natural gas prices rallied 15.01% in the week as the US natural gas storage fell by 250 billion cubic feet in the last week. The total US natural gas storage stood at 1.443 trillion cubic feet as on last week, the lowest during the week in any year since 2004.
On Thursday, 20 February 2014, the NYMEX natural gas March contract hit $6.400 per million BTU, the highest since December 2008.
Approximately 52% of US households use natural gas from November through March for heating purposes, and this is considered the peak season for gas consumption.
US Natural Gas was last trading at $6.360 per million BTU at the time of reporting.