Crude Falls Over 1% On Demand Concern (USO, UNG, XOM, TDW, BP, FGP, SZYM, SU)
Crude oil fell sharply in Monday on profit booking with other commodities after posting moderate gains last week. Pressure is coming after China reported larger than expected deficit for the month of February.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April slumped $1.16 or 1.08% to $106.24 a barrel after hitting session low of $105 a barrel. April Brent crude on London’s ICE Futures exchange fell $0.90 to $125.09 a barrel.
On Friday, crude had rallied over 1% on reports that employers added 227,000 jobs in February, ahead of economists’ estimates of 213,000 jobs, easing fears of another QE.
However, even after today’s sharp correction, analysts believe that the prices are well supportive near $105 a barrel given an expected recovery for the U.S. economy and continued tensions over Iran’s suspected nuclear arms development.
ICE gasoil for March changed hands at $1,027.50 a metric ton, down $6.25 from Friday’s settlement.
Crude had been trading higher over the past few weeks as Tension between Iran and the West over Tehran’s nuclear program escalated of a disruption to oil supplies from the Mideast Gulf. But talks on the dispute are due to start soon, calming fears of an immediate crisis.
Overnight, China reported a trade deficit of $31.48 billion in February after reporting a $27.28 billion surplus in January, missing Economists’ target of a deficit of $8.5 billion.
United States Oil Fund LP (ETF)(NYSEARCA:USO) lost 1.17% and United States Natural Gas Fund, LP (NYSEARCA:UNG) fell 3.10% after slumping to its 10-year low last week.
Tidewater Inc. (NYSE:TDW) is the notable loser and slumped 4.83% after on reports that the company could face an undetermined amount of costs to redeploy oil rigs from Angola to other markets. “Tidewater believes that such a course is preferable to entering into a new joint-venture agreement that would contain terms that would not be in the best interests of Tidewater and its stockholders,” the company said of its negotiations with the government-owned oil company of Angola over its Sonangol venture.
“Tidewater believes that such a course is preferable to entering into a new joint-venture agreement that would contain terms that would not be in the best interests of Tidewater and its stockholders,” the company said of its negotiations with the government-owned oil company of Angola over its Sonangol venture.
Exxon Mobil Corporation (NYSE:XOM) is bucking the trend and rose 1.15% after on reports that the company has finalized an agreement with Iraq over payment for its work on the West Qurna-1 oil field.
Ferrellgas Partners, L.P. (NYSE:FGP) shares slumped 8% to $15.36 after the stock was downgraded by Wells Fargo to Underperform , citing risk to the company’s current level of distribution payment. The firm also trimmed its price target range to $11 – $13 from $16 – $18.
Solazyme Inc (NASDAQ:SZYM) soared 6.50% after Mad Money’s Jim Cramer provided positive comments on the stock. The company’s game plan of transforming a range of plant-based sugars into oils has drawn increasing interest as oil prices linger at high levels.
Other large cap oil related stocks are under pressure with the fall in crude prices include BP plc (ADR)(NYSE:BP) declined 0.06% and Suncor Energy Inc. (USA)(NYSE:SU) lost 2.66%.
