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UPDATE 6-Oil futures range-bound in low volumes, eyes on Ukraine
April 21, 2014 / 12:50 PM / 3 years ago

UPDATE 6-Oil futures range-bound in low volumes, eyes on Ukraine

* Leading U.S. economic indicators support oil briefly

* Gasoline futures rise after report of refinery shutdown

* Eyes on Ukraine peace deal, further sanctions on Russia (Updates prices, adds U.S. statements on Syria, Ukraine)

By Sabina Zawadzki

NEW YORK, April 21 (Reuters) - Brent crude oil strengthened slightly while U.S. crude futures were briefly supported by positive economic data on Monday but prices were range-bound in low volumes following Easter Sunday with no significant escalation in tensions over Ukraine.

Gasoline futures led the U.S. oil complex with traders and analysts citing a report of an upcoming refinery shutdown on the Gulf Coast as supporting the contract.

But volumes were low in all markets as traders kept to the sidelines after the Easter holiday weekend with the London market remaining closed for Easter Monday.

U.S. crude futures jumped 30 cents a barrel after the Conference Board said its leading economic indicators, a gauge of future economic activity, rose in March.

But they gradually backed off the gains throughout the day, settling 7 cents higher at $104.37 a barrel. Brent crude settled 42 cents higher at $109.95 a barrel, having briefly flirted with $110 a barrel.

“My feeling is that we’re still concerned about Ukraine and we’re still getting a little support from the economy ... But we’re not up by much and volumes are still light because people are out for the holidays,” said Phil Flynn, analyst with Price Futures Group.

The May contract for U.S. crude oil futures will expire at the end of Tuesday but analysts said they did not expect volatility stemming from a switch to the June contract.

Brent crude oil found support from the war of words between Russia and the United States over Ukraine, where a peace accord agreed in Geneva last week appeared to unravel after three died in the east in a Sunday attack on a checkpoint.

With U.S. Vice President Joe Biden in Kiev, the U.S. state department suggested Washington was considering sanctioning Russian President Vladimir Putin himself. Moscow, meanwhile, eased rules for Russian speakers in the former Soviet Union to acquire Russian citizenship.

The crisis in Ukraine has led to the worst confrontation between the United States and Russia since the Cold War and has supported oil prices due to concerns over what impact any future sanctions may have in particular on oil supply.

“We may see Brent rise further by $1 to $2 a barrel if the Ukraine crisis worsens, but it will retrace as the overall market is well supplied,” said Ken Hasegawa, a commodity sales manager at brokerage Newedge Japan.

Brent also strengthened after the state department said it had indications that chemical weapons were used in Syria and would examine allegations that the government was responsible.


RBOB gasoline futures rose over 1.0 percent earlier in the session and by 3:50 p.m. EDT (1950 GMT) they were 1.05 percent higher at $3.0867 a gallon.

Traders cited a Bloomberg report that Motiva Enterprises would shut a crude unit and a catalytic reformer unit later this month at its 600,000 barrel per day Port Arthur refinery in Texas, the largest in the country.

Motiva, a joint venture between Royal Dutch Shell Plc and Saudi Aramco, did not respond to requests for confirmation or denial of the report.

“That’s enough in a low volume day to make RBOB outperform the rest of the complex. All in all though, a ten-day outage in a shoulder period is not a big deal,” said Addison Armstrong, senior director of market research at Tradition Energy.

For a 24-hr analysis on Brent: here (Additional reporting by Alex Lawler in London and Manash Goswami in Singapore; Editing by Jane Baird and Tom Brown, Marguerita Choy and Chris Reese)

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