Oil Steadies, Takes Cue From Stocks
By Sarah McFarlane
Oil prices steadied on Tuesday, supported by stock market gains in Europe and Asia, with energy market fundamentals continuing to be overshadowed by moves in equities and currencies.
Brent crude, the global oil benchmark, was unchanged at $65.54 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.1% at $62.66 a barrel.
World stocks have been particularly volatile since a rout in early February, with oil broadly tracking their moves.
"Oil and equities were trading very much hand in hand and basically equity markets were calling the shots in terms of direction and trading patterns," said Bjarne Schieldrop, chief commodities analyst at SEB Markets.
Mr. Schieldrop said he expects in the short term this trend will continue and that the selloff in equities isn't yet over.
Oil was also supported by a slightly weaker dollar on Tuesday. As oil is priced in dollars, it becomes more affordable for holders of other currencies when the dollar weakens.
The Wall Street Journal Dollar Index, which tracks the U.S. currency against a basket of others, was down 0.1% Tuesday.
On a fundamental basis, the oil market continued to be caught between rising U.S. output and efforts by the Organization of the Petroleum Exporting Countries and other major producers including Russia to cut output.
Investors were monitoring news from the U.S. CERA Week conference in Houston, where OPEC's Secretary General Mohammad Barkindo said on Monday that the cooperation which led to an agreement between OPEC and other producers to cut oil production "is as solid as the rock of Gibraltar."
While Mr. Barkindo said it was too early to comment on whether the deal to cut output would be extended beyond the end of 2018, Nigerian oil minister Emmanuel Ibe Kachikwu said the agreement was likely to be renewed.
"U.S. oil production is booming, the rig count is increasing, but on the other side of that it's very clear that OPEC and the 10 cooperating countries are really delivering on their cuts," Mr. Schieldrop said.
Nymex reformulated gasoline blendstock -- the benchmark gasoline contract -- eased 0.3% to $1.93 a gallon. ICE gas oil changed hands at $573.00 a metric ton, down $1.00 from the previous settlement.
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(END) Dow Jones Newswires
March 06, 2018 06:44 ET (11:44 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.