Oil ends mixed after mild rig count drop, heating oil spikes

Fri Feb 20, 2015 4:40pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Barani Krishnan

NEW YORK (Reuters) - Crude prices ended mixed on Friday as the number of U.S. rigs drilling for oil fell far less than expected this week, while heating oil jumped 6 percent after severe winter cold crimped output at three refineries.

After many bets that crude would rally on Friday from another plunge in the rig count, and short-covering before the expiry of the front-month in West Texas Intermediate (WTI) futures, the action was in refined products instead.

News that at least three refineries, accounting for more than two-thirds of the U.S. East Coast's refined output, are being disrupted by single-digit temperatures sent heating oil futures to six-month highs.

"It's sell crude, buy products today," said Dominick Chirichella, senior partner at the Energy Management Institute in New York. "The issues with the East Coast refiners have certainly been weighing on the market."

WTI's March futures settled down 82 cents at $50.34 a barrel, expiring as the front-month contract.

Until two weeks ago, March WTI had the highest ever open interest for a front-month. Market bulls hoping for a further price recovery from oil's crash to near six-year lows had thought the contract would see a last-minute spike in short-covering that would have sent prices soaring.

The front-month in benchmark Brent settled just a penny higher at $60.22, after falling to a week low of $57.80 on Thursday.

Brent held steady despite data from oil services firm Baker Hughes showing the oil rig count down by just 37, the smallest weekly decline this year. The rigs total itself was at the lowest in more than three years.   Continued...

Pump Jacks are seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson/Files