Oil Sinks On Weak China Data and As Heating Season Ends
NEW YORK, March 10 (Reuters) - U.S. oil fell by more than $1 per barrel on Monday, pressured by an unexpected drop in China's exports that stoked fears of a slowdown in the world's second-largest economy.
Moderating temperatures that will reduce the need for heating fuels also weighed on U.S. oil prices. U.S. ultra low-sulfur diesel futures, more commonly known as heating oil, were down more than 1.5 percent.
Oil on both sides of the Atlantic was pressured as traders unwound some of the risk premium associated with fears of an escalation in tensions in Crimea over the weekend.
The crisis in Ukraine had pushed money managers to collect a record number of bullish bets in U.S. oil futures and options last week, U.S. government data showed on Friday.
Data from the IntercontinentalExchange showed the same managers raised their bullish Brent positions to their highest since October.
"There was selling pressure early on from Chinese economic data," and the lingering tensions in Russia are not providing clear support, said Dwayne Pliska, senior trading consultant with HighGround trading group in Chicago. "We're still looking for (U.S. oil to) possibly drop to the key technical and psychological level of $100."
After two straight days of gains, Brent crude was trading 1.09 cents lower at $107.91 by 1:40 p.m EDT (1740 GMT), having fallen $1.25 earlier in the session. U.S. oil fell $1.61 to $100.97 a barrel after touching a high of $102.82.
The spread between global benchmark Brent and U.S. oil
U.S. oil's discount to the global benchmark has narrowed by nearly $9 since the beginning of the year as TransCanada's Gulf Coast pipeline has funnelled oil from Cushing to theGulf Coast.
With heating season coming to an end and refiners in maintenance season, traders and analysts expect that oil leaving Cushing will pool along the coast, forcing a temporary glut and capping prices until stocks are drawn down to make gasoline for summer driving season. Oil stocks in the Gulf Coast have risen every week over the last 1.5 months.
"We will continue to see draws out of Cushing, but I think we will see much larger builds on the Gulf Coast," said Tariq Zahir, managing member of commodity trading advisor Tyche Capital Advisors in New York.
U.S. oil refiners were expected to take slightly less capacity offline this week than last week, data from research company IIR showed.
Most global markets focused on weak data out of China that showed the No. 2 oil consumer's exports in February fell 18.1 percent from a year earlier, following a 10.6 percent jump in January. Many risk assets and stock markets fell on the weak data even as though it likely reflects a slowdown accruing to the Lunar New Year holidays. Copper prices hit an eight-month low.
Oil traders seemed to put tensions in Ukraine on the back burner, though Russia's continued push to take hold of the Crimean peninsula was expected to keep markets volatile.
Brent oil was alternately supported and pressured by the ongoing crisis in Libya that has cut into oil output. Libya's parliament has ordered that a special force be sent within one week to "liberate" all rebel-held ports in the volatile east, officials said on Monday, raising the stakes over a blockage that has cut off vital oil revenues.
At the same time, Libya's National Oil Company said production had restarted at the El Sharara field which feeds export terminals in the west and would reach capacity on Tuesday afternoon.
(Additional reporting by Lin Noueihed in London and Manash Goswami in Singapore; Editing by Marguerita Choy and Bernadette Baum)
Copyright 2014 Thomson Reuters.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension