Crude Oil Falls Over $2 On China Concern (USO, UNG, RCON, CVI, TRP, RGP)
Crude oil slid about $2 on Tuesday on renewed concerns that China may face downside risk, which could hurt the demand for oil going forward.
Crude-oil futures for April delivery slid $2.10, or 2%, to $105.99 a barrel on the New York Mercantile Exchange. Yesterday, it made two-week high on global economic optimist and weak dollar.
The dollar index, which measures the U.S. unit against a basket of major rivals, jumped to 79.65, compared to 79.451 in late North American trading Monday.
Meanwhile, Saudi Arabia, the world’s largest oil exporter, said Monday it would work alone and in cooperation with other producers to make sure of adequate global supplies of crude oil, market stability and fair prices.
This morning, China has raised pump prices for diesel and gasoline, seen as leading to higher crude prices worldwide.
April gasoline slid off a penny, or 0.2%, to $3.36 a gallon. April heating oil lost 3 cents, or 0.80%, to $3.24 a gallon.
Investors would focus on weekly inventory from the American Petroleum Institute late Tuesday followed by more closely watched U.S. Energy Information Administration data on Wednesday.
Analysts are estimating a 2.1 million barrel build in U.S. commercial crude inventories for the week ended March 16.
United States Oil Fund LP (ETF)(NYSEARCA:USO) lost 1.62% to $40.62 and United States Natural Gas Fund, LP (NYSEARCA:UNG) fell 0.43% to $18.44.
Recon Technology, Ltd. (NASDAQ:RCON) shares soared 94.22% to $4.36 after rising over 168% in the prior session after announcing it had successfully used a fracking technique developed by Baker Hughes (BHI) to complete a project at a field being developed by Sinopec (SNP).
CVR Energy, Inc. (NYSE:CVI) lost 1.85% to $26.59. the company rejects Carl Icahn’s extended $30/share tender offer, and asks shareholders not to participate.
TransCanada Corporation (USA)(NYSE:TRP) lost 0.55% after the company that it plans to shutdown its Keystone Pipleline in April to an attempt to retrieve a pipeline inspection gauge that became disconnected during cleaning.
Regency Energy Partners LP (NYSE:RGP) shares slumped about 4% after announcing an 11M share stock offering, good for proceeds of $278.9M based on today’s close.