ND:U.S. Demand, Supply Issues Keep Oil Futures High
U.S. winter demand and global supply issues continued to keep crude-oil futures elevated with both Nymex and Brent crude trading within a tight price range in Asia Tuesday.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $100.72 a barrel at 0529 GMT, up $0.42 in the Globex electronic session. April Brent crude on London's ICE Futures exchange fell $0.13 to $ 109.05 a barrel.
U.S. markets were closed for the Presidents Day holiday on Monday with no floor trading for oil. Markets are set to reopen later Tuesday and the weekly oil inventory report from the American Petroleum Institute has been postponed by a day to Wednesday.
The Energy Information Administration's weekly petroleum report is now due on Thursday.
Strong winter-driven fuel demand in the U.S. has resulted in distillate stocks dropping well below five-year average levels, and the movement of diesel shipments from Europe to the U.S. to meet the shortfall.
"The improved dynamic has lifted both distillate and Brent refining margins in Europe, which if sustained, could lift local demand for Brent," Morgan Stanley said in a note, adding that tight fuel stocks could support near-term upside for oil.
It said Brent crude prices are also supported by outages in the Buzzard oilfield in the North Sea, delaying cargos for Forties crude for February.
Oil major BP PLC. recently declared force majeure on the exports of Angolan Plutonio crude due to disruptions caused by a damaged hose, analyst Tan Chee Tat at Phillip Futures said.
Together with BP's 180,000 barrel-a-day Great Plutonio Project closing for four weeks of maintenance in March, Angola is unlikely to resume full production capacity in the near term, he said.
Angola, a member of the Organization of the Petroleum Exporting Countries, has been the second-largest supplier of crude oil to China since 2005, behind Saudi Arabia, according to the EIA.
Meanwhile, the U.S. and Iran have voiced caution over the prospect of a deal to curb Tehran's nuclear program, reducing chances of a diplomatic breakthrough, which would have paved the way for Iranian crude to return to global markets.
Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 99 points to $2.8152 a gallon, while March heating oil traded at $3.0886, 104 points higher.
ICE gasoil for March changed hands at $926.75 a metric ton, up $2.75 from Monday's settlement.
