WSJ:Crude Oil Futures Mixed Ahead of US Inventories
By CASSIE WERBER
Crude oil futures were mixed in quiet London trading on Thursday morning, awaiting fundamentals news from the U.S. and in the absence of market-moving macroeconomics.
At 1045 GMT, the front-month March Brent contract on London's ICE futures exchange was down 19 cents at $112.61 a barrel.
The front-month March light, sweet crude contract on the New York Mercantile Exchange was trading 34 cents higher at $95.57 a barrel.
Positive economic data from China supported Brent close to its January highs in Wednesday trading, and Thursday morning the benchmark crude wasn't experiencing any major movements.
Later in the day, market participants will focus on U.S. energy fundamentals when the Energy Information Authority delivers its weekly U.S. fuel inventory report for the week to Jan. 18, delayed a day by Monday's U.S. public holiday.
Refinery utilization rates are "likely to sink further, slipping below 88% of capacity as producers continue to reduce runs ahead of the seasonal turnaround period," wrote VTB Capital analyst Andrey Kryuchenkov in a note.
The reduced refinery runs, as well as increased crude imports to the U.S., will help build stockpiles, potentially leading to a lower price. Kryuchenkov wrote: "We expect a mildly bearish reading that could still weigh on prices a little before the end of the week."
Also suggesting an oil glut on U.S shores, some 2 million barrels of Canadian Hibernia crude was reportedly shipped to Europe last month "after failing to find a taker on the American Atlantic Coast," according to analysts at PVM.
Wednesday, Total began the process of chartering a VLCC to carry North Sea crude to South Korea, a hub of Asian industry. The charter was cancelled, however, meaning that no cargoes of North Sea crude are scheduled to head East of Suez next month.
According to PVM, "the continuous arbitrage of North Sea crude to South Korea has proved to be a factor supportive of BFOE prices and the wide premium in the Brent-WTI spread."
The ICE's gasoil contract for February delivery was down $1.00 at $969.75 a metric ton, while Nymex gasoline for February delivery was down 26 points at 2.8312 cents a gallon.
