Futures Movers: Oil prices on track to post a decline for month of February

by | Feb 27, 2023 | Stock Market

Oil futures declined on Monday, with both major crude benchmarks on track for February losses in the penultimate session of the month. The U.S. benchmark has suffered as the U.S. government reported nine weekly gains in a row for crude inventories, while uncertainty about the global economic outlook and a rebound by the U.S. dollar have also kept a lid on prices, analysts said.

Price action
West Texas Intermediate crude for April delivery
CL00,
-0.67%

CL.1,
-0.67%

CLJ23,
-0.67%
fell 61 cents, or 0.8%, to $75.71 a barrel on the New York Mercantile Exchange. The U.S. benchmark traded down by 4.3% in February.

April Brent crude
BRNJ23,
-0.82%,
the global benchmark, fell 58 cents, or 0.7%, to $82.58 a barrel on ICE Futures Europe. May Brent
BRN00,
-0.81%

BRNK23,
-0.81%,
the global benchmark, edged down 63 cents, or 0.8%, to $82.19 a barrel. Brent was down 3.4% in February based on activity in the front-month contract.

Back on Nymex, March gasoline rose 0.2% to $2.3641 a gallon, while March heating oil
HOH23,
+1.19%
rose 1.2% to $2.8307 a gallon.

April natural gas
NGJ23,
+4.83%
rose 3.9% to $2.648 per million British thermal units.

Market drivers “The downbeat mood reflects the continued buildup of crude inventories week after week despite talks of a tight market,” Manish Raj, managing director at Velandera Energy Partners, told MarketWatch. “Clearly, the physical market isn’t as tight as the market chatter portrays it to be.”

“‘Clearly, the physical market isn’t as tight as the market chatter portrays it to be.’”

— Manish Raj, Velandera Energy Partners

The U.S. Energy Information Administration reported a 7.6 million–barrel rise in domestic crude inventories for the week ended Feb. 17 — that marked a ninth weekly increase in a row. The only times commercial inventories have been higher were during the glut of 2016-17 and in the early days of the pandemic in 2020, said Alex Kuptsikevich, senior market analyst at FxPro, in a note. Crude supplies are now 15.1% higher than one year ago, he noted. Sharply rising inventories have seen U.S. production stabilize at 12.3 million barrels a day over the past three weeks, the analyst said, and in comparison to the ramp-up in production from mid-2011 to mid-2015 and from October 2016 to March 2020, output is now seeing a “creeping increase,” signaling the U.S. is in no hurry to lose the market share that Russia and the Organization of the Pe …

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