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US crude ends softer, losses capped by cold weather demand

Reuters with CNBC.com
Thursday, 20 Feb 2014 | 2:38 PM ET
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U.S. crude oil pared losses and was little changed on Thursday after government data showed that frigid weather continued to fuel robust heating oil demand, countering weak Chinese economic data.

Sustained cold and forecasts for more snow drove distillate inventories to fall by another 339,000 barrels in the week to Feb. 14, according to data from the U.S. Energy Information Agency.

Crude stocks at the Cushing, Oklahoma, hub fell by an expected 1.73 million barrels as a new pipeline has been draining excess supply from Cushing, the WTI contract's delivery point, to the Gulf Coast, which has provided support for prices.

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Andrew Su, CEO at Compass Global Markets, explains why he thinks Wednesday's peak in oil prices are temporary and is expecting prices to recede to $95 a barrel by the end of the first-half.

April Brent crude was down 30 cents above $110 a barrel, after settling at its highest level this year on Wednesday. U.S. crude futures for March delivery settled down 39 cents to near $102.92 a barrel. The contract closed on Wednesday at its highest since Oct. 8.

Other data released Thursday showed U.S. manufacturing activity in February grew by the most in four years and unemployment benefits fell for a second week in a row, also bullish for U.S. oil.

Capping gains in U.S. crude and pushing Brent prices lower was poor economic data from China that showed manufacturing activity shrank in February to the lowest in seven months, and employment fell at the fastest pace in five years.

Meanwhile, natural gas futures held above $6 per mmBtu, after inventory data showed stockpiles fell in line with analysts expectations, but remained near 10-year lows.

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