MW: Oil futures mostly lower with supply data on tap
By Myra P. Saefong and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures traded mostly lower Wednesday, with the expiring March contract holding above $96 a barrel as investors looked ahead to this week’s petroleum inventory reports.
Crude oil for March delivery CLH3 -2.33% fell by 41 cents, or 0.4%, to $96.25 a barrel on the New York Mercantile Exchange after a low at $96.06. The contract expires at the end of the Nymex trading session.
April crude oil CLJ3 -2.36% , which becomes the front-month contract, traded at $96.59 a barrel, down 51 cents, or 0.5%.
The moves follow March crude’s 80-cent advance on Tuesday. Those gains came in the wake of upbeat German data, and as the S&P 500 SPX -0.32% rallied to a new five-year high. See: Oil futures end higher, back above $96 a barrel.
The market was set to get weekly U.S. oil-inventory numbers from the American Petroleum Institute late Wednesday, followed Thursday morning by the more closely watched U.S. Energy Information Administration report. Both reports are delayed due to Monday’s holiday.
Citi Futures expects the EIA report to show a climb in crude inventories between 2 million and 3 million barrels. It also forecast a climb of 500,000 barrels to a fall of 500,000 barrels in gasoline inventories and a decline in distillates of between 500,000 barrels and 1.5 million barrels.
If the API report reveals a further reduction in inventory levels at Cushing, Okla., the delivery hub for Nymex oil futures, prices for West Texas Intermediate crude should profit, said analysts at Commerzbank, in a note Wednesday.
Enterprise Products Partners L.P.’s EPD +0.03% Senior Vice President William Ordemann said Tuesday that the Seaway Pipeline is expected to carry an average of 295,000 barrels of oil a day between February and May, The Wall Street Journal reported.
Ordemann also said the amount of crude carried through the pipeline won’t reach capacity for the “foreseeable future,” the report said. Capacity was expanded in January to 400,000 barrels per day from 150,000 barrels per day. See WSJ report on the Seaway Pipeline.
A spokesman for Enterprise Products Partners said Ordemann made remarks in testimony before the Federal Energy Regulatory Commission but didn’t have his actual statements on hand.
Even though the throughput, or amount of crude carried through the pipeline is below full capacity, “capacity already appears to be sufficient,” said the Commerzabank analysts, citing declines in Cushing stocks observed in recent weeks.
“This suggests that the price differential between Brent [crude] and WTI will gradually narrow,” they said.
London-traded benchmark Brent North Sea crude for April delivery UK:LCOJ3 -1.58% was down 79 cents, or 0.7%, to $116.73 a barrel on ICE Futures.
Back on Nymex, petroleum products traded mostly lower, with March heating oil HOH3 -1.04% down less than a cent at $3.18 a gallon. March gasoline RBH3 -2.20% dropped 4 cents, or 1.3%, to $3.08 a gallon.
March natural gas NGH13 +0.34% bucked the trend to trade 2 cents, or 0.5%, higher at $3.29 per million British thermal units, extending gains after closing out Tuesday’s session 3.8% higher.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
