New York oil prices have climbed about $1 a barrel this week closing on Wednesday at $100.29, while London oil slipped to close at $105.85 on hopes that the Ukrainian situation will not lead to a curtailment of oil supplies to Europe. US crude was supported by a 989,000 barrel drop in supplies at Cushing, Okla. and the announcement that the Seaway pipeline, which runs from Cushing to Houston, will have its capacity doubled by early June. This along with the newly opened Keystone pipeline should be more than enough to keep further gluts from developing at Cushing. The Federal Reserve’s announcement that it will further reduce its bond buying would normally hurt oil prices, but the Fed also noted that it expects unemployment to fall in 2015 and 2016, increasing the demand for gasoline.
The weekly stocks report showed little change in US refining activity which is normally lower at this time of year as maintenance programs and changeovers to summer grades of gasoline are underway. With crude  imports holding steady at about 7.3 million b/d and domestic production up slightly to a 26-year high of 8.22 million b/d, US crude inventories were by 5.8 million barrels last week while gasoline and distillate stocks dropped by 2.1 million and 3.1 million barrels respectively.
Most of the recent international news has focused on Russia’s takeover of the Crimea. Despite the harsh rhetoric and threats of mutual sanctions being exchanged between Russia and many other countries, neither Moscow nor its oil and gas customers want to see Russian oil and gas supplies curtailed. Europe needs Russian energy for the foreseeable future and without its oil and gas export earnings, Moscow would soon be broke. The loose talk about the US coming to Europe’s aid with large exports of oil and LNG simply are not in the cards for many years, if ever.
Natural gas prices have been bouncing around $4.50 per million BTUs this week with traders balancing a new forecast of colder than normal weather descending on the country shortly against the arrival of spring and a drop in demand.
Not much news from the Middle East this week. Bombings in Iraq continue at a normal pace, government forces continue to push back rebels in Syria, and an increasing number of attacks on government personnel are taking place in Egypt.  The Iranian nuclear talks have resumed in Vienna amid concerns about the effect that the deteriorating relations between Moscow and the West will have on the negotiations.
Some new economic data out of China suggests that the country’s economy slowed sharply in February, but as the month included the Lunar New Year holiday, it will take another month or two to determine if we have a trend or an aberration.