Sanctions against Russia are once again under the spotlight as US President Barack Obama warned that more measures resulting in further isolation would follow if Russia remains on its current course. Crude oil price climbed higher with the front-month contract for WTI crude oil gaining +1.08% while the Brent crude contract closed largely flat at 107.03. Gold remained soft and slipped -0.61%.
Speaking at the EU-US summit in Brussels, Obama condemned that "Russia's leadership is challenging truths that only a few weeks ago seemed self-evident: that in the 21st century, the borders of Europe cannot be redrawn with force". He stressed that Russia is isolated and the G7 are united to impose "additional, deeper sanctions if Russia attempts "to do the same in other parts of Ukraine". Obama, nonetheless, added that he recognizes "that in order for Russia to feel the impact of these sanctions, it will have some impact on the global economy as well as on all the countries represented here today".
US’ dataflow came in better than expected, durables goods orders gained +2.2% in February after the January was revised lower to a -1.3% drop a month ago. The market had anticipated a gain of +1%.Excluding transportation, durables goods orders added +0.2% while the January reading was revised down to a +0.9% gain. In the US session today, initial jobless claims probably showed an increase of +5K to 325K in the week ended January 21. Pending home sales in February might have stayed flat from a month ago, following a +0.1% increase in January.
On oil inventory, the DOE/EIA reported that total crude oil and petroleum products stocks gained +5.46 mmb to 1038.24 mmb in the week ended March 21. Crude stockpile rose 6.62 mmb to 382.47 mmb as inventory soared in 3 out of 5 PADDs. Cushing stock slipped -1.33 mmb to 28.48 mmb. Utilization rate was up +0.4% to 86.0%.
Gasoline inventory dropped -5.10 mmb to 217.20 mmb although demand increased +5.76% to 9.00M bpd. Production fell -2.50% to 9.00M bpd while imports added +49.1% to 0.63M bpd. Distillate inventory rose +1.56 mmb to 112.40 mmb as demand fell -16.42% to 3.48M bpd. Imports fell -13.96% to 0.23M bpd while production added +0.38% to 4.73M bpd during the week.