Oil Fall Slightly on pipeline news (USO, UNG, XOM, CHK, CIE, DNR, LNG)
Crude oil fell slightly on Monday news a pipeline reversal could come earlier estimated if regulatory approval is granted, and after weekend talks on Iran’s nuclear program eased supply tensions.
Crude for May delivery fell 6 cents, or 0.05%, at $102.78 a barrel on the New York Mercantile Exchange, after hitting session low of $102 a barrel.
Earlier, crude oil was moving within narrow range following a better than estimated retail sales of rthe month of March, which lifted U.S. equities as well.
The owners of the pipeline have asked federal authorities to allow them to reverse the pipeline’s flow by mid May, earlier than their initial mid-July start date. The pipeline would carry about 150,000 barrels of oil a day from the midwest to the Gulf of Mexico refiners.
Brent on Monday traded $2.03, or 2%, lower to $119.36 a barrel on ICE Futures in London.
Meanwhile, multilateral talks concerning Iran’s nuclear program took place in Istanbul over the weekend. Iran and international powers described the talks as constructive, according to reports, with negotiations to enter a second round next month in Baghdad.
Tensions surrounding Iran’s nuclear intentions have simmered in recent months, prompting international sanctions that have helped underpin strength in crude prices.
Other energy products traded lower, with gasoline for May delivery slumped 6 cents, or 1.9%, to $3.8 per gallon. May heating oil fell 5 cents, or 1.7%, to $3.12 a gallon. Natural gas for the same month’s delivery rebounded 3 cents, or 1.3%, to $2.01 per million British thermal units.
United States Oil Fund LP (ETF)(NYSEARCA:USO) was down marginally at $39.13 and United States Natural Gas Fund, LP(NYSEARCA:UNG) was up 1.20% to $15.12.
Exxon Mobil Corporation (NYSE:XOM) was up 0.90% to $83.66 as the company signed a strategic cooperation agreement with Rosneft counterpart Eduard Khudainatov at Vladimir Putin’s residence outside Moscow. Under the partnership, Rosneft will receive 30% stakes in three Exxon projects in North America, while Exxon gets to explore the Arctic.
Chesapeake Energy Corporation (NYSE:CHK) shares slumped 3.66% to $19.22 after analyst at Morgan Stanley downgraded the stock to Hold, citing plunging natural gas prices. Though MS recently lowered its 2012 natural gas composite spot forecast to $2.40/MMBtu, the firm still thinks there’s more downside than upside risk to its estimate.
Cobalt International Energy, Inc. (NYSE:CIE) shares slumped 11% to $25.26 after a Financial Times article shines a spotlight on possible violations of U.S. anti-corruption laws by its Angolan partner.
Denbury Resources Inc. (NYSE:DNR) added 0.50% to $18 after the company said it has lined up 8 financial institutions to create a $4B debt facility. The facility will be used to fund the construction of CEP’s Sabine Pass LNG liquefaction plant, and its acquisition of the Creole Trail Pipeline from parent Cheniere Energy, Inc. (NYSEAMEX:LNG). Shares of LNG soared 2.50% as well.