U.S. oil futures nudged higher in Thursday dealings, shaking off weakness attributed to data a day earlier that showed a further rise in U.S. crude inventories as prices for the commodity look to score back-to-back monthly gains.
Price moves
-
West Texas Intermediate crude
CL00,
+0.31%
for April delivery
CL.1,
+0.31% CLJ24,
+0.31%
rose 17 cents, or 0.2%, to $78.71 a barrel on the New York Mercantile Exchange. Prices based on the front month were poised for a monthly rise of around 3.9%. -
April Brent crude
BRNJ24,
+0.06% ,
the global benchmark, was down 8 cents, or 0.1%, at $83.60 a barrel on ICE Futures Europe, ahead of its expiration at the end of the trading session. It traded around 3.6% higher for the month. May Brent
BRN00,
+0.16% BRNK24,
+0.16% ,
the most actively traded contract, was down 9 cents, or 0.1%, at $82.06 a barrel. -
March gasoline
RBH24,
+0.95%
was nearly up 0.8% at $2.29 a gallon, looking to post a monthly rise of 2.6%, while March heating oil
HOH24,
+0.58%
climbed nearly 0.1% to $2.66 a gallon, eyeing a monthly loss of 4.5%. The March contracts expire at the day’s settlement. -
Natural gas for April delivery
NGJ24,
-0.48%
traded at $1.865 per million British thermal units, down 1.1% for the session, and down 12% for the month.
Market drivers
The Energy Information Administration reported Wednesday that domestic commercial-crude inventories rose by 4.2 million to 447.3 million barrels for the week ending Feb. 23. The EIA has now reported gains in crude supply for five weeks in a row.
The report also showed weekly supply declines of 2.8 million barrels for gasoline and 500,000 barrels for distillates.
The data also showed a continued rebound in gasoline supplied, a key measure of implied consumer demand, wrote Tyler Richey, co-editor at Sevens Report Research. It hit its second highest level since mid-December at just shy of 8.5 million barrels a day, he said.
“A better consumer demand outlook is supportive of prices near term.” said Richey. Domestic production, meanwhile, has been holding steady at a record 13.3 million barrels a day since late January.
“Oil production not rising is not bearish and is easing a previous headwind on the market, setting futures up for more upside,” he said.
Analysts have recently pointed out that WTI and Brent oil futures in “backwardation” – a situation in which prices for oil for delivery in the near future are higher than those for later delivery, signaling that global supplies have tightened.
“One potential factor contributing to the considerable backwardation in the term structure of the futures market is the fact that the Biden Administration has added to the Strategic Petroleum Reserve for 12 out of the last 14 weeks, taking barrels out of the commercial market and into government storage,” said Richey. “The amount of the SPR adds has been relatively low, but it does seem to be contributing to the rally in active month futures and increasingly backwardated futures term structure.”
Also on Thursday, data from the EIA showed that U.S. natural-gas supplies in storage declined by 96 billion cubic feet for the week ended Feb. 23. On average, analysts forecast a decline of 90 billion cubic feet, according to S&P Global Commodity Insights.
