Crude Oil & Natural Gas Trading At Recent Highs

Crude oil broke above $96 for the first time in weeks after the release of the weekly API inventory. Oil prices eased in Asian trade Thursday as investors locked in profits after they hit their highest levels this year on forecasts of stronger demand.  Crude is down 28 cents trading at $96.46 in Asian trading. Data for the week ending Jan. 17 is expected to show a decline of 1.9 million barrels in crude oil stocks and an increase of 1.7 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

Analysts said traders will keep their eye on a meeting next week by the Federal Reserve for more clues about its plans to wind down its massive stimulus for the economy.  New York’s main contract West Texas Intermediate for March delivery was down 31 cents at $96.42 a barrel mid-morning trade after rising by $1.76 in closing trade Wednesday.  Brent crude for March dipped 32 cents to $107.95 after gaining $1.54. 

The International Energy Agency in its monthly report projected demand for crude would grow 1.3 million barrels per day in 2014, up from a previously forecast increase of 1.2 million. It said consumption accelerated at the end of 2013 as advanced economies, led by the United States, saw growth pick up. That came as the International Monetary Fund raised its global growth forecast for the first time in nearly two years — predicting 3.7 per cent expansion in 2014, up from its earlier 3.6 per cent estimate. It grew three per cent last year.  The optimistic outlook was fuelled by a solid recovery in the United States while other countries move away from austerity. 

Chinese data is also weighing on the commodity after lackluster manufacturing data. Today’s report, known as the Flash PMI, is based on 85 per cent to 90 per cent of responses to surveys sent to more than 420 manufacturers. The final reading will be released on Jan. 30. China’s flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to 49.6 in January from December’s final reading of 50.5. A drop below 50 signals a slowdown, above that is an indication of expansion.

Natural gas continued its meteoric rose to the highest level since June 2011 as a deep chill enveloped states from South Dakota to Maine. Demand for natural gas is expected to remain high as the frigid air stays in place and some schools and businesses reopen Thursday following Tuesday’s big snowstorm. Natural gas jumped 26 cents on Wednesday and added 34 points this morning to trade at 4.733 as traders look towards tomorrow’s inventory release.