Crude Gains After Last Week’s Big Fall

Crude oil is little changed on Monday trading just above the $94.00 a barrel level with gains being supported by the restart of a key Libyan oil field. A correction from the big falls on Thursday and Friday and a rebound in the US service industries may provide further support.

After production at the El Sharara oil field resumed over the weekend, crude supply from Libya is set to more than double. However, the situation in the country remains volatile since a different set of protesters are blocking an oil pipeline in the west.

In the US, the world’s largest oil consumer, the ISM non-manufacturing index probably rose to 54.6 in December, signaling expansion among the companies that account for almost 90% of the world’s biggest economy.

Yet, China’s non-manufacturing sector weakened in December countering gains in oil. Growth in China`s services sector fell to a four-month low in December as business expectations dropped, adding to evidence that the second largest economy lost steam at the end of 2013.

On Friday, the Energy Information Administration data showed that crude stockpiles shrank last week by 7.01 million to 360.6 million barrels, a fifth weekly decline, while gasoline inventories climbed by 844,000 barrels to 220.7 million and distillates surged by 5.04 million barrels to 119.1 million.

Meanwhile, South Sudan`s oil production remained a concern although the government and rebels last week agreed to peace talks. The talks could face delays, after gunfire erupted on Sunday in the country`s capital.

- WTI crude oil futures for February is trading around $ 94.26 a barrel after rising $0.30

- Brent futures for February settlement is trading around $ 107.29 a barrel after rising $0.40

- Natural gas is trading at $ 4.238 per cubic feet after rising 0.56%

- Gasoline is trading at $ 2.6572 per cubic feet after rising 0.32%

- Heating oil (diesel) is trading at $ 2.9577 a gallon after rising 0.62%