Crude oil futures settled at their lowest price in more than one week on signs that illuminate the tensions in Egypt, as the government agreed to comply with the main opposition party group for the first time.
Light, sweet crude for March delivery fell $ 1.55, or 1.7%, to end at $ 87.48 a barrel on the New York Mercantile Exchange, the lowest settlement since January 27. Brent crude on the ICE Futures Exchange slipped below $ 100-a-barrel threshold, settling down 58 cents, or 0.6%, to $ 99.25 a barrel.
revolt of Egypt entered its third week Monday with some signs of a resolution, but the lack of a significant supply disruption eased concerns among oil market participants. Crude prices have fallen by 3.4% the last two trading sessions.
“The market is a little more accustomed to some of these,” said Peter Donovan, vice president and oil trader at Vantage Trading.
The recent declines erase most of the profits that oil prices have made the past week on the back of the crisis in Egypt. The country is not a major oil producer, but is home to the Suez Canal and assume pipeline energy companies both large thoroughfares. Traders also fear that the crisis could spread to major oil producers elsewhere in the region.
These fears largely unfulfilled. The Suez and assume continue to function normally and the unrest has been limited to countries that are not major exporters of crude. An attack on a natural gas pipeline in the Sinai Peninsula Saturday gas to Israel and Jordan, but the attack failed, futures prices lift.
On Monday, representatives of President Hosni Mubarak met formally with the Muslim Brotherhood, the main opposition group, for the first time, raising hopes that a settlement of the unrest could be on the horizon.
“We have not seen a supply disruption and there seems less risk of contagion in the region,” said Tim Evans, analyst at Citi Futures Perspective.
Separately, abundant supplies in the U.S. sent the premium of Brent crude on Nymex West Texas Intermediate to settle at $ 11.77 a barrel, the second highest premium ever. Traders will be closely monitored to deliver, due Wednesday at 10:30 am Eastern in the U.S. Department of Energy for understanding the American inventory levels.
Crude stocks in the U.S. are expected to climb to 2.3 million barrels, according to a survey of analysts polled by Dow Jones Newswires. Gasoline stocks are seen rising by two million barrels, while distillate stocks, including heating oil and diesel, are expected to fall 1.2 million barrels. Refinery use is expected to decline 0.2 percentage points to 84.3% of capacity.
Front-month March reformulated gasoline Blend Stock or RBOB, settled 1.52 cents, or 0.6%, to $ 2.4505 a gallon. March heating oil fell 1.06 cents, or 0.4%, to $ 2.7061 a gallon.
source:onlinewsj
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