Crude retreats after making gains ahead of US data, oil and gas stocks advance

Oil prices inched lower in the afternoon after making gains earlier today as the US dollar weakened against the euro ahead of today’s US economic data, which will include the preliminary reading of the Q4 US GDP, the Chicago PMI (Purchasing Managers Index) and New York ISM (Institute of Supply Management) updates as well as the University of Michigan consumer sentiment index.
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, driving up the demand.
This week’s inventories report from the Energy Information Administration (EIA) had little impact on the crude prices, which held steady despite an unexpected increase of 3 million barrels in crude stockpiles last week, signalling weaker demand. At the same time, gasoline and distillate stocks including heating oil declined by 900,000 barrels and 600,000 barrels respectively.
Earlier in the week, data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. Gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude slid to US$76.21/barrel on the ICE Exchange, while US light, sweet crude inched lower to US$78.14 on the New York Mercantile Exchange today.
Blue chip oil and gas producers were in buying mode today. Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) advanced 1.3%, while BG Group (LSE: BG) added 1%. BP (LSE: BP) rose 1.1%, while fellow supermajor Shell (SLE: RDSB) added less than 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) were up 1% and 2% respectively.
Most midcaps followed the trend. Melrose Resources (LSE: MRS) climbed 5% to take the lead. JKX Oil & Gas (LSE: JKX) rose 2%, Dana Petroleum (LSE: DNX) tacked on 1.7% and Premier Oil (LSE: PMO) climbed 1.1%. Soco International (LSE: SIA) and Salamander Energy (LSE: SMDR) were flat, while Heritage Oil (SLE: HOIL) posted a small decline.
Dragon Oil (LSE: DGO) was at the bottom of the pile with a 2.4% loss.
Services companies Wood Group (LSE: WG) and Wellsteam Holdings (LSE: WSM) did well, climbing 1.8% and 1.6% respectively.
Junior stocks didn’t show much movement today. North America focused oil & gas junior Pantheon Resources (AIM: PANR) moved with the sector, adding 4%.

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