Crude Oil Declines on Oil Supply Outlook

Crude oil futures declined on Thursday as the US government denied the rumors that they have reached a deal with United Kingdom for countries to release strategic oil reserves. On Thursday, US President, Barack Obama and UK’s Prime Minister David Cameron discussed global energy issues but did not reach any deal according to White House spokesman.

Crude oil futures contract for April delivery declined 0.3 percent or $0.32 to settle at $105.11 per barrel on the New York Mercantile Exchange. Oil remained volatile in yesterday’s session as the respective contract touched its intraday low of $103.78 per barrel while reached its intraday high of $106.18 barrel.

In London, Brent crude also fell 1.1 percent or $1.42 to settle at $123.55 per barrel on the ICE Futures exchange in London.

Chief global economist, Julian Jessop from Capital Economics commented, “The drop is a reminder that Iran does not hold all the cards and a forewarning of bigger declines to come if (or when) an official release is actually confirmed.”

Among other commodities, gasoline futures contract for April delivery declined 1.8 percent or $0.06 to settle at $3.29 per gallon while heating oil futures for the same month delivery fell 1.2 percent or $0.04 to settle at $3.22 per gallon.

Natural gas futures also remained under pressure after the latest report by Energy Information Administration showed surprise decline in supplies data. As per EIA natural gas supplies fell 64 billion cubic feet for the week ending March 9th, 2012 while analysts expected the decrease in natural gas supplies between the range of 56 and 60 billion cubic feet.

Natural gas futures contract for April delivery fell 0.2 percent to 42.28 per British thermal units on NYMEX.


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