Crude Oil & Natural Gas Begin To Ease As Winter Weather Breaks

The February 26^th release of “This Week In Petroleum” starts off saying “The sustained cold weather that overtook much of the United States during January and February increased demand for space heating fuels, disrupted crude oil and natural gas production as well as refinery, rail, and pipeline operations, and challenged the ability of energy infrastructure to deliver fuel. Cold temperatures caused space heating demand for distillate, propane, and natural gas to increase significantly. Limited gas supplies and pipeline capacity available to serve parts of the Northeast, particularly New England, were used to meet space heating needs for which no alternative fuel options were available. As natural gas supply to power plants was curtailed and as prices for natural gas spiked higher”

Crude oil eased by 26 cents on Thursday morning while Brent oil remained close to its close at 109.34. Accuweather short term and long term forecasts have changed over the past

days to indicate a warming trend across the US as winter storms eased and it looks like winter may end by the end of the month.

U.S. oil prices rose Wednesday after weekly U.S. inventory data showed a smaller-than-expected increase in national crude supplies. WTI settled up 76 cents, or 0.7%, at $102.59 on the New York Mercantile Exchange. Prices for the global Brent crude contract rose 1 cent to $109.52 a barrel on the ICE Futures Europe exchange.

The amount of crude stored in the U.S. increased by just 68,000 barrels, well below the 800,000-barrel increase analysts projected in a survey by The Wall Street Journal and estimated by an industry trade group, the American Petroleum Institute. It was the smallest weekly increase since June, suggesting that demand for crude may be stronger than the market expected.

The U.S. Energy Information Administration reported Wednesday that crude stored in a major hub fell by 1.1 million barrels. Improvements in the nation’s oil infrastructure have enabled greater shipments of crude from the hub in Cushing, Okla., to Gulf Coast refineries, where it can be processed and sold to meet overseas demand.

Natural gas continued to tumble this morning trading at 4.498 down by 38 points after steadily declining on Wednesday. U.S. natural gas futures ended nearly 5 percent lower on Wednesday as the front-month March contract expired after a wild ride that included touching the highest price in five years and the biggest three-day fall in eight years. This week’s drop whittled the 2014 gain in gas futures to 15 percent from 53 percent at the high seen Monday as arctic weather and record heating demand rapidly depleted gas supplies in storage.