Crude Oil Gains But Remains Weak in Asian Trading

WTI Light Sweet crude oil gained 20 cents in the Asian session on Tuesday as the US dollar weakened taking a breather after climbing as high as 82.20. West Texas Intermediate oil rebounded from the lowest level in 10 weeks and Brent crude gained as a North Sea pipeline system remained shut after a platform leak. The American Petroleum Institute is scheduled to release separate supply data today. The industry group collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. Yesterday, U.S. crude oil hit its lowest level in 2013 and settled down for a third straight session as worries of an over-supplied market and slowing China growth, while gold fell as demand waned for bullion-backed exchange-traded funds. U.S. crude oil futures fell in reaction to slowing growth in China and evidence of rising crude stockpiles in the United States. China reported over the weekend that its services sector expanded at the slowest pace in five months in February, and factory growth also cooled to multi-month lows. In the United States, automatic government spending cuts, known as the “sequester,” were triggered on Friday as lawmakers failed to agree on a resolution to prevent them. Last Friday, Chinese PMI disappointed markets, with the HSBC private PMI numbers matching forecast which was lower than the previous month and government numbers met expectations but these expectations had been reduced from a 52.00 number to 50.40.

On the economic calednar today, China’s 7.5% economic growth target for this year is “fairly conservative,” and the world’s second-largest economy will likely expand more quickly than that, Li Daokui, an influential academic and former adviser to the People’s Bank of China, said Tuesday. Crude oil for April delivery is trading up 16 cents $90.28 a barrel on the New York Mercantile Exchange. Yesterday, it shed 56 cents, or 0.6%, to settle at $90.12 a barrel, the lowest level for a front-month contract since Dec. 24. Prices, which have now fallen for three sessions in a row, dipped under the key $90 level during Monday’s session, touching a low of $89.33.

Crude-oil futures settled lower Monday, with China’s move to cool property prices stirring up concerns over energy demand and helping prices mark a fresh low for the year. Oil prices were also pressured by worries over demand from the eurozone, as the Brent crude market looked to production outages in Libya and the closure of a pipeline system in the North Sea.

China’s government late Friday announced certain property-purchase restrictions, including higher down payments and mortgage rates on second homes in cities that have seen steep rises in property prices

According to the International Monetary Fund, the U.S. spending cuts could cost the world’s biggest oil consumer about 0.5 percent of its economic growth, a factor that could weigh on global oil demand.

US Natural gas settled at their highest level in almost six weeks Monday, lifted by forecasts for below-normal temperatures that suggest steady demand for gas-fired heating in the coming weeks. Natural gas is trading at 3.548 after the Asian session.