Myra P. Saefong and William Watts, MarketWatch

SAN FRANCISCO/NEW YORK
EnergiesNet.com 03 27 2023

Oil futures ended Monday at their highest in two weeks, building on last week’s bounce as banking sector worries eased, but prospects for lower weather-related demand lead natural-gas prices to their lowest settlement in more than a month.

Price action

• West Texas Intermediate crude for May delivery CL00, 0.77% CL.1, 0.78% CLK23, 0.77% rose $3.55, or 5.1%, to settle at $72.81 a barrel on the New York Mercantile Exchange — the highest front-month finish since March 13, according to Dow Jones Market Data.
  
  
• May Brent crude BRN00, 0.62% BRNK23, 0.82%, the global benchmark, gained $3.13, or 4.2%, to $78.12 a barrel on ICE Futures Europe, also ending at a two-week high.
  
  
• Back on Nymex, April gasoline RBJ23, -0.31% climbed 3.7% at $2.6842 a gallon.
  
  
• April heating oil HOJ23, 0.48% added 2.8% to $2.7704 a gallon.
  
  
• April natural gas NGJ23, -1.34% slid 5.8% to end at $2.088 per million British thermal units, the lowest front-month contract settlement since Feb. 21.

Market drivers

“The crystal ball, which had been clouded by the banking crisis, is now showing a profit opportunity” for oil, said Manish Raj, managing director at Velandera Energy Partners. “After the erratic selloff in mid-March, cooler heads have started to prevail as traders look at the dip in oil prices as a good entry point.”

“The crystal ball, which had been clouded by the banking crisis, is now showing a profit opportunity.”— Manish Raj, Velandera Energy Partners

Markets, including crude, were showing signs of relief after the weekend brought no adverse developments on the global banking front.

First Citizens BancShares Inc.  FCNCA, +53.74% entered a deal to assume all the deposits and loans of the failed Silicon Valley Bridge Bank from the Federal Deposit Insurance Corp., the regulator announced on Monday. Bloomberg reported that U.S. authorities were considering an expansion of an emergency lending facility that would allow more time for First Republic Bank FRC, +11.81% to shore up its balance sheet. Share of U.S. banks rose Monday.

“It’s been a volatile few weeks for crude, caught up in the banking storm as investors are forced to scale back their expectations for the economy which, in turn, has weighed heavily on demand prospects,” said Craig Erlam, senior market analyst at OANDA, in a market update.

Fears of banking troubles could turn into a full-fledged crisis were blamed for sinking crude prices to 15-month lows earlier this month.

“With sentiment slowly improving and yields inching cautiously higher, so too are oil prices,” said Erlam. “It may take some time for the dust to settle and prices to fully reflect the new outlook after such a turbulent period which should ensure volatility remains for now.”

Natural-gas futures, meanwhile, dropped by more than 6% on Monday.

The market for the heating fuel “struggled to balance over-supply with a soft demand environment,” wrote Victoria Dircksen, commodity analyst at Schneider Electric, in a daily note.

Temperature forecasts in April are beginning to shift to “more spring-like temperatures,” said Dircksen, citing a short-term weather outlook from the National Oceanic and Atmospheric Administration.

marketwatch.com 03 27 2023