Natural-gas market awaits weekly U.S. supply update
By Myra P. Saefong and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures traded higher Thursday, with investors weighing the outlook for the market on the heels of positive U.S. economic data and a forecast for lower global demand growth.
Crude oil for delivery in April CLJ3 +0.38% rose 35 cents, or 0.4%, to $92.87 a barrel on the New York Mercantile Exchange. Prices had closed 2 cents lower on Wednesday.
London-traded Brent crude for April delivery UK:LCOJ3 +1.17% , however, tacked on a much bigger $1.22, or 1.1%, to $107.70 a barrel on ICE Futures, looking to recoup a 1% loss seen in the previous session.
The concerns about China and about global economic growth more generally are putting pressure on Nymex oil, said Tom Essaye, editor of the 7:00’s Report, a daily commentary on equity and commodity markets and the economy.
“But things are picking up here in the U.S. which is offering support,” he said. “It’s a momentum trade, and I think economic growth will be the catalyst higher.”
On Thursday, weekly U.S. jobless claims fell unexpectedly, wholesale prices jumped in February and the fourth-quarter current account gap narrowed.
Losses Wednesday followed a monthly report from the International Energy Agency, which further lowered its forecast for global oil demand while increasing its projection for supply growth.
However, Deutsche Bank analysts described the IEA’s demand forecast as below consensus, contrasting it with a brighter projection by the U.S. Energy Information Agency, “reflecting their more optimistic view on economic growth for this year, notably for China.”
For its part, Deutsche Bank leaned more toward the EIA view. “Our economics research team’s upbeat assessments for growth this year inform our more positive outlook for global oil-demand growth,” they said, adding that they had revised their forecast for U.S. economic growth in 2013 to 2.3%, up from 1.7% previously.
On the other hand, Citi Futures — which has been bearish on oil futures — said their “blend” of forecasts from the IEA, EIA and the Organization of the Petroleum Exporting Countries (OPEC) showed a global oil surplus for the first half of the year, although the last six months of 2013 “looks like a closer balance.”
Wednesday’s oil-price decline also coincided with the U.S. dollar’s climb to a seven-month high.
Gains for the U.S. currency can often depress crude prices, which are quoted in dollars, as a rising greenback makes the commodity more expensive for holders of euros, yen and other rival units.
The ICE dollar index DXY -0.11% was at 82.938 Thursday, little changed from 82.936 late Wednesday in North America.
Petroleum-product prices made modest moves Thursday, as April gasoline RBJ3 -0.36% added less than half a penny, or 0.2%, to $3.15 a gallon, while April heating oil HOJ3 +0.18% edged up less than a cent, or 0.2%, to $2.93 a gallon.
However, April natural gas NGJ13 +2.80% gained 6 cents, or 1.6%, to $3.74 per million British thermal units.
The EIA will issue its weekly update on natural-gas supplies shortly. Analysts polled by Platts forecast a decline between 133 billion cubic feet and 137 billion.
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. You can follow him on Twitter at @KitchenNews.
