MW:Crude rebounds further on reserve-release denial
By Barbara Kollmeyer and V. Phani Kumar, MarketWatch
MADRID (MarketWatch) — Crude-oil prices edged higher during European trading, adding to the commodity’s price bounce from Thursday lows after an Obama administration official denied an agreement with the U.K. to release strategic oil reserves.
April futures for light, sweet crude CLJ2 +0.24% rose 34 cents, or 0.2%, to $105.57 a barrel in electronic trading Friday. During Thursday’s regular New York Mercantile Exchange trading, the front-month contract fell 32 cents but ended well off the day’s $103.78 low.
At a briefing Thursday, a White House spokesman said that President Barack Obama and U.K. Prime Minister David Cameron discussed energy issues, but they hadn’t reached any agreement on crude reserves.
The remarks followed a Reuters report that the two nations had discussed the possibility of releasing strategic oil stocks to ease the economic burden from rising crude and gasoline prices.
“The announcement might have been just an attempt to spread market rumors to help take the steam out of oil prices,” said analysts at JBC Energy, in emailed comments. “On the other hand, given that high oil prices are a heavy burden for struggling OECD economies, it cannot be excluded that action will be taken.”
The analysts also said the release of reserve stocks wouldn’t justified from a supply-vs.-demand view, at least for the second half of this year, citing expectations that global crude stockpiles will increase in line with seasonally lower demand through June as well as “diminished consumption due to a weak economy.”
Energy traders also kept watch on the doings in currencies. The ICE dollar index DXY +0.05% , which tracks the greenback against a basket of six other major currencies, rose to 80.396, up from 80.158 in late North American trading on Thursday.
Rounding out the major energy futures, April heating oil HOJ2 +0.24% rose 0.1% to $3.23 a gallon and May gasoline RBK2 +0.31% climbed 1 cent to stand at $3.29 a gallon, while April natural gas NGJ12 -1.19% eased 2 cents to $2.26 per million British thermal units.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
