NYMEX Oil Stabilizes Above $104 Amid US Crude Stock Changes and Libya Unrest, According to Reuters

SINGAPORE, March 31 (Reuters) – U.S. oil prices held steady above $104 per barrel on Thursday, supported by escalating tensions in Libya and the Middle East, despite a larger-than-expected increase in U.S. crude stocks.

FUNDAMENTALS

• NYMEX crude for May delivery ticked up five cents to $104.32 per barrel by 0012 GMT, having decreased by 52 cents in the previous trading session.
• ICE Brent crude dropped two cents to $115.11 per barrel.
• According to the Energy Information Administration, U.S. crude inventories rose by 2.95 million barrels last week, with Cushing oil stocks reaching a record level, while gasoline inventories saw a significant decline.
• President Barack Obama has proposed reducing U.S. oil imports by one-third over the next decade, a target that previous administrations have struggled to achieve and that analysts deem highly ambitious.
• Amidst escalating conflict, U.S. officials reported that President Obama had authorized covert support for Libyan rebels, who were retreating against Muammar Gaddafi’s better-equipped forces.
• The Libyan government has warned it will take legal action against any international company that engages in energy transactions with rebel forces controlling portions of the country’s oil infrastructure.
• Major oil exporter Saudi Arabia and other Gulf nations have increased production in March to compensate for supply disruptions resulting from violence in Libya, as noted in a recent survey.

MARKET NEWS

• U.S. private sector employers added over 200,000 jobs in March, and the number of planned layoffs declined, reinforcing the expectation that a recovering labor market will support economic growth.
• Lorenzo Bini Smaghi, a member of the ECB’s Executive Board, cautioned that the debt concerns in the euro zone could ripple beyond the region’s periphery, predicting that the years ahead may prove just as challenging for central bankers as the last few.
• The yen weakened against major currencies, reaching new 10-month lows versus the euro and approaching a three-week low against the dollar, with rising speculation that Japan will follow the euro zone and U.S. central banks in delaying interest rate hikes.

DATA/EVENTS (GMT)

• 0430: Japan Government oil demand, trade data for February
• 0500: Japan Construction orders year-on-year for February 2011
• 0600: Germany Retail sales year-on-year, real for February 2011
• 0800: Germany Unemployment rate seasonally adjusted for March 2011
• 0900: Eurozone Inflation, flash year-on-year for March 2011
• 1230: U.S. Unemployment claims, Weekly
• 1400: U.S. Factory Orders for February 2011
• 1430: U.S. EIA natural gas stocks Weekly

(Reporting by Randy Fabi; Editing by Ed Lane)