Oil & Gas Recover From Friday’s Sell Off

Friday was a crazy day in the energy markets, with traders selling off to book obscene profits as crude oil and natural gas continued to climb mid session as the winter storm blanketed

the US east coast and the weatherman called for more snow and cold throughout the balance of February and into March. Oil price resumed its rally during last week. WTI oil increased by 1.9%; Brent oil, by 1%. Natural gas jumped to the highest price in five years as forecasters warned of more freezing U.S. weather. Hedge funds increased bullish bets on the heating fuel as inventories dropped to the lowest in a decade. Natural gas rose as much as 5.6 percent to $6.478 per million British thermal units in electronic trading on the New York Mercantile Exchange, the highest intraday price since Dec. 3, 2008.

On Friday, Accuweather reported that a series of storms could combine over the Northwest “snow would likely evolve near or along the I-95 corridor, leading to another round of disruptions to travel and daily routines,” it said. About 49 percent of U.S. households use gas for heating, with the biggest consumers in the Midwest, U.S. Energy Information Administration data show. Later in the day the forecast changes both the short term and near term, to a bit warmer and no major storms which pushed traders to sell and book immediate profits after Natural gas surged. This morning gas is trading at 5.133 up by 121 points after declining in the afternoon session in the US on Friday.  Gas surged 15 percent during the period covered by the report as winter storms brought snow and below-normal temperatures to the eastern U.S. Forecasts show a polar blast returning to the region this week. Gas supplies dropped to 1.443 trillion cubic feet in the seven days ended Feb. 14, the lowest level for the time of year since 2004, government data show.

Crude oil added 29 cents this morning to trade at 102.49, while Brent oil added 20 cents to reach 110.03 as traders recovered from Friday’s sell off.  West Texas Intermediate crude rose from the lowest price in a week amid speculation that cold weather in the U.S. will boost demand for heating in the world’s biggest oil consumer. WTI has risen in the past six weeks, capping the longest run of weekly gains in a year, as crude inventories at Cushing, Oklahoma, fell and cold weather bolstered fuel demand. Another blast of freezing air is forecast for the central and eastern U.S. this week as two storms threaten to bring snow to the Northeast, according to the National Weather Service.

The opening of the southern link of TransCanada Corp.’s Keystone XL pipeline in January eased a bottleneck in the central U.S. Supplies at Cushing, the delivery point for the WTI contract, fell 1.73 million barrels to 35.9 million, the lowest level since Oct. 25, the EIA said last week. Nationwide crude supplies rose 973,000 barrels to 362.3 million in the seven days ended Feb. 14.  Heating oil gained 106 points this morning also recovering from the sell off on Friday to trade at 3.0495. It seems that the weatherman cannot make up his mind as to what to expect this week.