By Arpan Mukherjee
Crude-oil futures were mixed in the Asian session Thursday, with
traders cautious ahead of a long Easter holiday weekend and a
meeting later in the day between the West and Russia over rising
tensions in Ukraine.
On the New York Mercantile Exchange light, sweet crude futures
for delivery in May traded at $104.14 a barrel at 0515 GMT, up
$0.28 in the Globex electronic session. June Brent crude on
London's ICE Futures exchange fell $0.09 to $109.51 a barrel.
The European Union, the U.S., Russia and Ukraine will meet in
Geneva on Thursday in an effort to de-escalate tensions in Ukraine.
Western diplomats on Wednesday played down hopes of a major
breakthrough at the talks.
"However, if the bar has been set low enough in terms of
expectations, then there is some chance that the market will
retreat on even very minor progress, such as an agreement to meet
again," Citigroup said in a report.
The West has accused Russia of supporting pro-Russia groups,
which have taken control of parts of eastern Ukraine. Ukraine's
military operation against the separatists meanwhile hit obstacles
as activists held buildings in as many as 10 cities close to the
Russian border.
Crude-oil prices remain elevated due to the Ukraine crisis
though they have fallen from earlier highs of this month.
Based on technical analysis, June Brent contract is "relatively
overbought," Citigroup said, adding that if the contract falls
below $108.27 a barrel, then the "market could flush even
lower."
Nymex crude continued to edge higher despite data showing on
Wednesday that U.S. weekly crude stockpiles recorded the biggest
one-week increase in 13 years.
Crude-oil stockpiles rose by 10 million barrels last week to
394.1 million barrels, U.S. Energy Information Administration data
showed. A Wall Street Journal poll of analysts had forecast stocks
to rise by 1.5 million barrels on week.
In addition to the geopolitical tensions in Ukraine, upbeat
economic data and outages among Organization of Petroleum Exporting
Countries is helping to underpin prices, Tan Chee Tat, investment
analyst at Phillip Futures, said in a report.
OPEC, which supplies more than a third of the oil consumed
globally each day, said Thursday that its production in March was
400,000 barrels a day below its agreed collective ceiling of 30
million barrels a day.
The Brent-WTI spread is currently at $5.37 a barrel.
Oil trading advisory firm Ritterbusch & Associates expects
the Brent-WTI spread to fall toward $5 a barrel, but says that "a
return to this region will be delayed by the huge U.S. crude supply
build."
Nymex reformulated gasoline blendstock for May--the benchmark
gasoline contract--fell 30 points to $3.0375 a gallon while May
heating oil traded at $3.0091--15 points lower.
ICE gasoil for May changed hands at $923.75 a metric ton--down
$1.50 from Wednesday's settlement.
Write to Arpan Mukherjee at arpan.mukherjee@wsj.com