Brent crude surged to a two-month high amid escalating tension between Ukraine and Russia, the world’s largest oil producer.
West Texas Intermediate rose to the most since September. The European benchmark climbed as much as 3 percent, boosting its premium to WTI. Ukraine mobilized its army reserves as Russia seized control of the Black Sea region of Crimea.
The U.S. is weighing sanctions against Moscow during the worst standoff between the West and Russia since the Cold War ended. WTI gained on speculation supplies at Cushing, Oklahoma, slid.
“The Russian foray into the Crimea is jacking up the geopolitical premium in the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
“The bulls are having their way and the rally continues.” Brent for April settlement climbed $2.73, or 2.5 percent, to $111.80 a barrel at 11 a.m. New York time on the London-based ICE Futures Europe exchange.
It rose to $112.39 earlier, the highest level since Dec. 30. Volume was double the 100-day average. WTI for April delivery gained $2.51, or 2.4 percent, to $105.10 a barrel on the New York Mercantile Exchange. Earlier, it touched $105.22, the most since Sept. 20. Volume was 82 percent above the 100-day average.
Brent’s premium over WTI was $6.70, up from $6.48 on Feb. 28, the narrowest level since October. The relative strength index of WTI futures rose to above 70, a level that signals price gains have been excessive.
Brent’s RSI was around 65. “We are reaching levels where, fundamentally, the market’s going to have trouble adjusting,” McGillian said.
Ukraine Standoff
Ukraine warned that Vladimir Putin’s military is strengthening its presence in Crimea as Russian servicemen confronted Ukrainian army units in the Black Sea district.
U.S. Secretary of State John Kerry is traveling to Kiev after discussing sanctions against Russia. “It’s geopolitics at play yet again but this time it’s from Ukraine and not from the Middle East,” said Michael Hewson, a market analyst at CMC Markets Plc in London.
Russia produced 10.9 million barrels a day of oil in 2013, the International Energy Agency said last month.
“Everybody is trying to figure out what impact this Ukrainian crisis is going to have on the oil market,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. The market rally is “due to nervousness on geopolitical climate.”
Cushing Supplies
U.S. crude supplies at Cushing, the delivery point for WTI futures, may have decreased for a fifth time last week, according to three analysts surveyed by Bloomberg.
Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company, and Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said inventories fell 1.5 million barrels. Finlon predicted a drop of 1.3 million.
Stockpiles at the hub fell to 34.8 million in the week ended Feb. 21, the least since October, according to the Energy Information Administration.
Inventories have declined as the southern leg of TransCanada Corp. (TRP)’s Keystone XL pipeline has moved oil to Texas Gulf Coast from the hub.
“Cushing is going to continue to drop,” Finlon said. “The flow from Cushing to the Gulf Coast is well established.
bloomberg.com
West Texas Intermediate rose to the most since September. The European benchmark climbed as much as 3 percent, boosting its premium to WTI. Ukraine mobilized its army reserves as Russia seized control of the Black Sea region of Crimea.
The U.S. is weighing sanctions against Moscow during the worst standoff between the West and Russia since the Cold War ended. WTI gained on speculation supplies at Cushing, Oklahoma, slid.
“The Russian foray into the Crimea is jacking up the geopolitical premium in the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
“The bulls are having their way and the rally continues.” Brent for April settlement climbed $2.73, or 2.5 percent, to $111.80 a barrel at 11 a.m. New York time on the London-based ICE Futures Europe exchange.
It rose to $112.39 earlier, the highest level since Dec. 30. Volume was double the 100-day average. WTI for April delivery gained $2.51, or 2.4 percent, to $105.10 a barrel on the New York Mercantile Exchange. Earlier, it touched $105.22, the most since Sept. 20. Volume was 82 percent above the 100-day average.
Brent’s premium over WTI was $6.70, up from $6.48 on Feb. 28, the narrowest level since October. The relative strength index of WTI futures rose to above 70, a level that signals price gains have been excessive.
Brent’s RSI was around 65. “We are reaching levels where, fundamentally, the market’s going to have trouble adjusting,” McGillian said.
Ukraine Standoff
Ukraine warned that Vladimir Putin’s military is strengthening its presence in Crimea as Russian servicemen confronted Ukrainian army units in the Black Sea district.
U.S. Secretary of State John Kerry is traveling to Kiev after discussing sanctions against Russia. “It’s geopolitics at play yet again but this time it’s from Ukraine and not from the Middle East,” said Michael Hewson, a market analyst at CMC Markets Plc in London.
Russia produced 10.9 million barrels a day of oil in 2013, the International Energy Agency said last month.
“Everybody is trying to figure out what impact this Ukrainian crisis is going to have on the oil market,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. The market rally is “due to nervousness on geopolitical climate.”
Cushing Supplies
U.S. crude supplies at Cushing, the delivery point for WTI futures, may have decreased for a fifth time last week, according to three analysts surveyed by Bloomberg.
Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company, and Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said inventories fell 1.5 million barrels. Finlon predicted a drop of 1.3 million.
Stockpiles at the hub fell to 34.8 million in the week ended Feb. 21, the least since October, according to the Energy Information Administration.
Inventories have declined as the southern leg of TransCanada Corp. (TRP)’s Keystone XL pipeline has moved oil to Texas Gulf Coast from the hub.
“Cushing is going to continue to drop,” Finlon said. “The flow from Cushing to the Gulf Coast is well established.
bloomberg.com
No comments:
Post a Comment