Crude oil futures weekly recap, July 21 – July 25

WTI and Brent futures climbed this week, as the US revealed its weekly oil report, to stir markets with mixed data. Elsewhere, the EU added to the list of sanctioned Russian individuals on Friday, in light of the Ukrainian crisis.

WTI September futures added 0.02% on Friday, closing the week at $102.09 per barrel, up about 0.2% for the week. Weekly high and low were at $103.45 on Tuesday and $101.00 per barrel on Friday, respectively. The contract added 2.2% last week.

September Brent in London gained 1.23% during Fridays session, to close at $108.39 per barrel, up about 1% for the week. Weekly high and low were at, respectively, $108.46 per barrel on Friday and $106.73, again on Friday. Brents premium to WTI was at $6.30 as trading closed, while last week it stood at $5.29. The European contract logged only minor losses last week.

“We’re moving on the headlines about the crisis in Ukraine,” Rob Haworth, senior investment strategist in Seattle at U.S. Bank Wealth Management, said for Bloomberg. “I’m skeptical that there will be any disruption of supply unless there was a major intensification of the crisis, which is unlikely.”

Ukraine, sanctions

The US said on Thursday, that it has evidence of Russian artillery firing across the border on Ukrainian military positions. The statement added, that Russia intends to deliver more and more powerful weaponry to separatists.

The West has widely accepted that it was pro-Russian rebels, who shot down the Malaysian airliner last week, using a Buk surface-to-air missile, supplied by Russia.

The Kremlin has not yet commented on the latest accusations, but has so far denied all allegations in relation with the fighting in eastern Ukraine.

During the Crimean crisis, Russian President Vladimir Putin also frequently denied any Russian involvement, only to later admit that it was indeed Russian soldiers, who drove off the Ukrainian military and took control of the peninsula.

In separate developments, the EU released an expanded list of sanctioned Russian individuals on Friday. The new round of restrictions does not include major companies, but the Bloc added that it will target whole industries soon. Officials had said earlier, that the new round of sanctions will touch on major sectors, such as finance, defense, high-tech and “dual-use” energy items.

The EU said it is targeting those who “actively support or are benefiting from Russian decision makers responsible for the annexation of Crimea or the destabilisation of eastern Ukraine”.

EU Council President Herman Van Rompuy has sent a letter to EU leaders specifying that such measures should only affect the Russian oil sector, not gas, because of Europes need for energy security, Reuters said.

Just hours before MH17 was shot down the US also widened its own list of sanctioned entities. The list of companies included small-arms manufacturer Kalashnikov, Gazprombank, a leading Russian bank, as well as state-owned energy giant Rosneft.

US reports

The US Energy Information Administration (EIA) posted its weekly oil inventories report for the seven day through July 18 this Thursday. The log revealed a 4 million-barrel draw for commercial crude oil inventories, while gasoline and distillates added 3.4 and 1.6 million barrels, respectively.

Oil at Cushing, Oklahoma, the delivery point for the NYMEX contract and the largest hub in the US, was reported at 18.8 million barrels for a 1.5 million-barrel draw, and is pushing minimum operating levels, traders say.

“The gasoline picture looks pretty grim,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said for Bloomberg. “The drop in Cushing supplies was the dominant theme right after Wednesday’s report, but the focus has changed. It’s the middle of the summer and gasoline supply is rising while demand is weak, which isn’t good for refiners.”

Initial jobless claims weekly figures scored an eight-year low this week, boosting sentiment ahead of the payrolls and unemployment data next week. Meanwhile, consumer inflation also proved in the upbeat, as a CPI rate of 2.1% was logged for June, ahead of the key Federal Open Market Committee (FOMC) meeting next week. Factories were reported to have expanded activities slightly slower than before, but logged a sizable growth nonetheless.

Several housing figures were also posted this week. Existing home sales scored better than expected in June, while new home sales scored a sizable monthly decline. Pending sales will be reported next week.

China, EU

HSBC posted its preliminary reading on Chinese factories for July this week, logging a significantly better sentiment for the worlds second-top oil-consuming economy.

“China is a big commodities player, and this is definitely positive for oil,” Avtar Sandu, senior commodities manager at Phillip Futures in Singapore, said for Reuters.

Elsewhere, Markit posted its preliminary July PMI readings for the Eurozone, with both manufacturing and services PMI for the Bloc logged quite higher than expected, standing for a sizable growth in both sectors.

Germany was again leading the rally, while France, while also logging slightly better than forecast, is still in the backwaters with a contraction for factories and only minor gains for services.

Next week

Next week will offer quite a bit of economic data. In addition to a plethora of PMI readings, there will be US consumer spending and income, GDP growth, employment data and a key FOMC meeting. The EU will post CPI, as well as employment data.