Crude-Oil Futures Settle Up 1.4% at $93.71 a Barrel
Crude-oil futures prices settled higher Friday, tracking strength in U.S. equities even as investors keep a wary eye on efforts to secure a bailout in Cyprus ahead of a Monday deadline.
Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled at $93.71 a barrel, up $1.26, essentially erasing Thursday's losses attributed to worries that economic collapse in Cyprus could rumble throughout Europe. The rise was the biggest since Feb.11. U.S. crude slipped 11 cents in week, amid signs of weak demand and a growing surplus in crude oil inventories. Analysts said crude oil stocks should begin to drop soon as refiners exit a heavy period of seasonal maintenance work which has curbed crude-oil needs.
ICE North Sea Brent crude oil inched up just 19 cents, to settle at $107.66 a barrel. Brent's premium to the U.S. benchmark continued to erode, settling at $13.95 a barrel on Friday, the lowest level since July 6, 2012. Last Friday, the spread between the front-month contracts for the benchmark futures settled at $16.37 a barrel.
Brent has come under increased pressure recently, as snags in pipelines and oil platforms have been resolved, allowing production to increase as maintenance is cutting crude-oil demand at European refineries. Production of competing West African crudes also is rising.
At the same time, higher flows of U.S. crude oil to the key Gulf Coast refining region are cutting reliance on crude-oil imports, and making Brent and other similar grades of crude less valuable.
"North Sea flows are ramping up and while more U.S. crude is making its way out of Cushing to the Gulf," said Gene McGillian, adding that recent declines in crude oil storage at the Cushing, Okla delivery point for the Nymex contract is giving the U.S. benchmark futures contract a boost., while Brent is also vulnerable to falling demand if Europe faces a deeper economic crisis.
Analysts at Barclays said in a note that Brent crude is likely to recover to the $111 a barrel level once the Cyprus crisis is resolved. Brent, as a global benchmark, may also be underpinned by expectations that demand for crude oil imports while rise in China as refinery maintenance work concludes, the analysts said in a research note.
April-delivery heating oil futures prices fell 1.2 cents Friday, to settle at $2.8843 a gallon. Reformulated gasoline blendstock futures for April delivery settled 0.81 cent lower, at $3.0625 a gallon and were 3.2% lower in the week.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.