Crude futures settled higher Monday, bouncing on a slew of a bullish geopolitical news over the weekend after last week’s sharp sell-off that saw the front-month Brent contract shave over 6% of its value between April 1 and Friday.
NYMEX May crude settled 66 cents higher at $93.36/b Monday, after trading between $92.46/b and $93.46/b during the US session. ICE May Brent closed 54 cents higher at $104.66/b, pulling up from lower levels late in the US session.
Front-month ICE Brent briefly hit a fresh eight-month low of $103.40/b late in the morning session before bouncing higher in afternoon trading.
The spread between the two contracts briefly narrowed to $10.80/b, its lowest level since late June 2012, before rebounding to settle at $11.30/b.
Analysts said the gains by crude prices were due to a series of geopolitical headlines over the weekend that helped bolster oil markets, trumping a closely avoided offshore oil and gas sector strike in Norway.
“There have been attacks in Nigeria, once again, and over the weekend, the Iran nuclear talks ended with no agreement and now plans to meet again,” Mike Fitzpatrick, of Kilduff Group, said in a note.
Militants from the Movement for the Emancipation of the Niger Delta claimed responsibility for an attack that killed 15 policemen in Bayelsa State. MEND was responsible for a campaign between 2006 and 2009 that hampered Nigerian oil production and exports.
Macroeconomic indications were light to start the week, though German statistics agency Destatis released fresh German industrial production numbers for February, showing an increase of 0.5%, which exceeded consensus expectations.
And crude markets were holding higher levels despite a resurgence in the US dollar overnight, when the yen hit its lowest level against the dollar since May 2009. The US dollar index was up 0.29% at 82.733 at the 2:30 p.m. (1830 GMT) NYMEX market settle, despite the relative strength of the euro, which climbed above and held over 1.30 against the dollar.
US equity markets turned cautiously positive late in US trading after a slow start to the week. At the NYMEX settle, the Standard & Poor’s 500 was up 0.27% at 1,557.49, while the Dow Jones Industrial Average was broadly unchanged at 14,565.8.
Product markets also posted higher marks, boosted by stronger crude prices in addition to a modest recovery after the sharp sell-offs seen over the last week.
NYMEX May RBOB closed 4.57 cents higher at $2.9093/gal, trading within a relatively narrow $2.8872-2.9154/gal range during the US session.
NYMEX May heating oil settled 4.39 cents higher at $2.9537/gal, while ICE April gasoil was $5.25/mt higher at $885.25/mt at 2:30 p.m EDT.
Source: Platts.com
