Oil rises in Asia
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $81.95 a barrel at 0629 GMT, up 45 cents in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose 48 cents to $80.37 a barrel.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $81.93 a barrel at 0515 GMT, up 43 cents in the Globex electronic session. April Brent crude on London’s ICE Futures exchange rose 47 cents to $80.36 a barrel.
Analysts said crude will likely maintain its bullish momentum this week, with further positive cues expected to support to the upside, but they caution against any surprise weakness in the equities or strength in the U.S. dollar, which could spark a big sell-off from near two-month highs.
Crude futures on Nymex settled 1.6% higher Friday after hitting a seven-week intraday high on the back of U.S. data that showed fewer job losses than expected, raising economic recovery hopes.
Two key factors that changed last week that will influence trading over the next few weeks, said Peter Beutel, president of trading advisory firm Cameron Hanover: The first was the switch to the April gasoline contract, which has helped refinery margins, providing fundamental support. “The other factor was the big increase in oil open interest as prices advanced, which is bullish. Funds have been buying a lot.”
Crude was also supported by comments from Qatari Oil Minister Abdulla bin Hamad Al Attiyah that the Organization of Petroleum Exporting Countries won’t change output quotas at its meeting next week, and would instead focus on improving compliance by member countries.
OPEC reduced output quotas in 2008 in response to plunging global crude oil prices. But compliance had fallen to 51% as of February, with several members raising production to take advantage of higher oil prices.
A phase of upward momentum in crude remains intact, despite prices hitting the key target of $82 a barrel, said Jim Ritterbusch of Ritterbusch and Associates, but “we feel that the funds are now setting on a near record net long holding that will eventually prompt a sharp downside reversal on any equity weakness or gasoline fundamentals that could prove too bearish to ignore.”
“As far as this week goes, we will look for the retail sales and consumer sentiment figures to fuel or stall the liquids’ bull rally,” said Stephen Schork, editor of the Schork Report.
Nymex reformulated gasoline blendstock for April–the benchmark gasoline contract–rose 155 points to $2.2865 a gallon, while April heating oil traded at $2.1100, 126 points higher.
ICE gasoil for March changed hands at $652 a metric ton, up 50 cents from yesterday’s settlement.
Source: Market Watch