Crude prices were slightly higher today after falling on yet more news from China, where the China Banking Regulatory Commission told lenders to check whether any of the loans have been used for inappropriate purposes, according to a report by Reuters. Last month, China undertook a series of measures to curb lending and prevent the economy from overheating. China remains the world’s second largest energy consumer and further tightening of the monetary policy signals lower demand for the crude for this year, which negatively impacts the prices.
Oil prices, which have recently surged to nearly $84 on increased demand for heating oil in view of an unusually cold winter, have also been hit by last week’s update from the Energy Information Administration (NYSEMKT:EIA), which said that gasoline stockpiles rose by 2 million barrels in the previous week, which was a greater than expected increase, while distillate stocks rose by 0.4 million barrels instead of the decline of 1.8 million barrels projected by Platts.
Brent Crude for March delivery inched higher to US$71.85/barrel in London, while US light, sweet crude improved to US$73.15/barrel on the New York Mercantile Exchange.
Oil supermajors are set to report on their performance this week with BP (LSE: BP) and Shell (LSE: RDSB) scheduled to release their quarterly figures on Tuesday and Thursday respectively.
Major oil and gas stocks were mixed. BG Group (LSE: BG) was in decline, shedding 1.3%. Cairn Energy (LSE: CNE) declined marginally, as did BP (LSE: BP), while Shell (LSE: RDSB) remained at the opening level. Tullow Oil (LSE: TLW) was the top performer in the sector in the FTSE 100 with a gain of nearly 1%.
Amec (LSE: AMEC) slid 1.3%, while another engineering firm Petrofac (LSE: PFC) was flat.
Midcaps also showed little movement. Dana Petroleum (SLE: DNX) and Heritage Oil (LSE: HOIL) declined marginally, while JKX Oil and Gas (LSE: JKX), Premier Oil (LSE: PMO) and Soco International (LSE: SIA) were flat. Fellow FTSE 250 constituents Melrose Resources (LSE: MRS) and Salamander Energy (LSE: SMDR) posted insignificant gains.
Dragon Oil (LSE: DGO) outperformed the sector, climbing 2%.
Juniors were little moved with the exception of US focused oil and gas junior Caza Oil & Gas (AIM: CAZA) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO), which both lost 7%.
Disclosure: The author holds no positions in the company