Crude Oil & Brent Oil Diverge

Traders will have to wait an extra day this week to get a look at the American Petroleum Institute’s report and the official EIA inventory release, which have been delayed one day due to the US Labor Day holiday. US markets were closed yesterday. This morning crude oil eased by 17 points as the US dollar continued to gain momentum pressuring dollar denominated commodities. WTI is trading at 95.79 while Brent oil added 20 points to reach 102.82. Global focus remains on Russia and the Ukraine. Russia’s Energy Minister Alexander Novak said on Monday that Moscow and Kiev have agreed to hold a new round of talks to resolve a gas crisis.

WTI oil prices gained by around 1.5 percent on Monday on bargain buying at lower levels as markets have significantly corrected in the recent weeks. Manufacturing growth has faltered in Europe and China at a time of ample supply, although the risk of production setbacks remained high in Libya where the government has lost control of most of the capital. Eurozone manufacturing growth slowed more than expected last month and factory activity in several key countries appeared to be stagnating. French factory output fell at its fastest in 15 months in August. Chinese factory growth slipped to a three-month low in August as foreign and domestic demand cooled, and the country’s huge construction sector is also seeing a slowdown, muddying the outlook for demand.

U.S. crude oil futures eased in early Asian trade on Tuesday, as weak economic data in Europe and China sparked concerns about oil demand, but Brent crude edged up on unrest in oil-producing Libya. Libya’s oil production has risen to 700,000 barrels per day. However, Libya’s government said it has lost control of most ministries and state institutions located in Tripoli after rival armed groups took over the capital. In Iraq, the United States carried out air strikes on Saturday against Islamic State fighters near the besieged Shi’ite town of Amerli in northern Iraq and airdropped humanitarian aid to civilians trapped there.

Natural gas tumbled this morning giving up 53 points but remains just above the $4.00 range at 4.015 after traders pushed the commodity to a seasonal high on the hopes that the warmer temperatures would increase residential demand. US natural gas trading remained shut on Monday over the observation of Labor Day. Natural gas prices moved up by 0.32% for the day. The 6 percent weekly gain was the market’s best since six months. In the last week alone, prices rose 8 percent, the biggest gain over a two-week period since mid-February. The rally came after signs that summer temperatures were finally heating up after almost two months of mild weather.