Crude Oil Rallies Late In The Day As Sentiment Shifts

Crude oil traders are awaiting this afternoon’s official EIA inventory release while easing 36 cents this morning after rallying on Tuesday late in the day as traders shifted sentiment after comments from President Putin that Russia was not looking to annex any other territory. Crude oil is trading at 98.52 while Brent oil is at 106.73 up by 10 cents in morning trade.

WTI crude oil settled higher 1.65% at $99.70 per barrel. Brent closed higher at $106.79 a barrel moving up by 0.52%. US crude oil prices moved higher before the last day of the April contract, lower inventories compare to previous week expectation pushed the prices bit higher.  U.S. crude oil soared to end at a one-week high on Tuesday, ahead of the official inventory data and outcome from the two-day U.S. Federal Reserve policy review meet later this week. Investors await the Fed’s decision on stimulus tapering, with expectations the central bank will trim its asset purchase by $10 billion to $55 billion per month at the end of its two-day meeting that began this morning.

In economic news from the U.S., a Commerce Department report showed housing starts with some further downside in February, after reporting a sharp drop in new residential construction in the previous month. Meanwhile, a Labor Department report on Tuesday showed modest increase in U.S. consumer prices in February, with an increase in food prices offsetting a drop in energy prices. Iran exported oil at levels higher than allowed under Western sanctions for a fourth straight month in February. In Libya, oil exports have been between 100,000 and 120,000 bpd in the last two weeks, A Libyan rebel leader accused the United States on Tuesday of behaving like pirates after U.S. naval forces seized an oil-laden tanker that had sailed from a rebel-held port. Traders can expect crude oil prices to move higher for the day as lower than previous inventory expectation and spark seen at Libya and Iran region can push the prices higher. Crude futures had fallen on Monday as markets downplayed fears of disruptions to Western European energy supplies after Crimea voted in a disputed referendum to leave Ukraine and join Russia. But on Tuesday, US Vice President Joe Biden warned Russia that it faced the prospect of more sanctions over its move to absorb Crimea, calling it “nothing more than a land grabs”. And he announced talks in coming weeks with European partners to discuss ways to ease their dependence on Russian natural gas supplies. Meanwhile markets reacted positively to President Putin’s assurances.

Natural gas retreated 1.8 percent yesterday with forecasters calling for less cold weather and lower heating demand over the next couple of weeks. Natural gas futures on the New York Mercantile Exchange fell 8 cents, or 1.8 percent, to $4.456 per million British thermal units Tuesday. MDA Weather Services forecast mild weather over much of the United States over the next five days. Traders can expect Natural gas prices to remain in range to lower for the day over expectation of milder weather in upcoming week. Natural gas eased by 22 points in the early session today to trade at 4.448 as the days of winter count down quickly.  Heating oil is taking its cues from natural gas trading at 2.9080 while gasoline is exchanging at 2.8902 rising a bit on higher Brent oil prices.