Oil price range-bound as robust dollar offsets bargain-hunting
Crude oil futures have been trading near yesterday’s closing prices, following a sharp drop during the previous session. Crude prices were range-bound as bargain hunting was offset by a US dollar which steadied after pulling back from multi-year highs on weaker-than-expected US retail sales.
Brent for April delivery, which expires during the next session, had declined four cents to $57.04 per barrel as of 07:02 GMT on the London-based ICE Futures Europe exchange. The benchmark shed about 1.24 percent of its value yesterday and is set for a 4.3 percent drop on a weekly basis.
Reuters quoted Daniel Ang, analyst at Philip Futures, as saying that crude prices “have dropped quite hard. Movements now are market driven – it’s bargain hunting people are going in for”.
April WTI futures had gained five cents, or 0.11 percent, to $47.10 a barrel in electronic trading on the NYMEX in New York as of 07:02 GMT. The US benchmark dropped 2.67 percent during the previous session, settling at $47.05, the weakest close for a most-active contract since 29 January.
The Wall Street Journal cited yesterday’s The Seven’s Report, which offers daily markets commentary, as saying that the recent surge in the US dollar is “undoubtedly adding pressure to energy futures and the entire commodity space, but the fundamental situation remains decidedly bearish for global oil prices as supply levels continue to surge week to week, and global demand outlooks are stagnant at best”.
On Wednesday the Energy Information Administration said that US crude-oil inventories rose by 4.5 million barrels to 448.9 million barrels in the week to 06 March. It marked the ninth consecutive week that the Washington-based agency had reported a rise in crude supplies.
Based on the two front month contracts, Brent was trading at a premium of $9.94 to WTI as of 07:02 GMT. The premium has contracted from the one-year high of $13 a barrel hit last week.