Traders Selling Brent and Crude Oil Spreads

                          This morning WTI crude oil is trading at 93.61 adding 25 cents since the market opened. West Texas Intermediate oil traded near the highest level in almost a week. U.S. crude stockpiles probably increased from the largest in more than two decades, a Bloomberg News survey showed before a government report.

Yesterday, crude oil prices closed higher, lifted by gains in gasoline futures and strong selling of the spread between Brent crude and US crude. Brent’s premium to US West Texas Intermediate futures closed at $11.3 per barrel, after narrowing to just over $11 in afternoon trade, the lowest level since June.

Venezuela’s production of crude and natural gas liquids has stabilized at 3.12million barrels per day after state oil company PDVSA halted a decline in output from the OPEC nation’s second-most productive region, Oil Minister Rafael Ramirez said in an interview on Monday. South Sudan will start marketing crude from the end of May after resuming oil production on Saturday, its oil minister said on Monday now that the two Sudan’s have finally reached agreements.

Brazil’s oil regulator, the ANP, said yesterday that it authorized Chevron to restart output from an offshore oil field more than a year after a November 2011 spill forced the No. 2 U.S. oil company to stop Brazilian production.

Last week crude prices were pressured by a slowdown in US manufacturing activity and weak growth in US job markets which has raised demand concerns and hurt prices. A shutdown of a pipeline which carries 90000 bpd due to an oil spill has also lead to a supply glut at the delivery point, thus putting additional pressure on prices. Crude prices also fell significantly as inventories rose to a 22 year high and came at 2.7 million barrels. Ongoing tensions between North Korea and South Korea seemed to have eased after China rebuked North Korea’s rhetoric.

Energy speculators today will watch the US as Alcoa kicks off the first-quarter earnings season after the stock market closes Monday. Analysts expected the aluminum giant to report slightly lower earnings compared to a year ago. Overall, Wall Street is looking for improved earnings from many companies as the economy shows signs of strengthening.

The minutes from the Federal Reserve’s last meeting will be released Wednesday afternoon. That may give investors more insight into the central bank’s view of the economy and prospects for the Fed’s bond-buying stimulus program to continue at its current pace.

Natural gas declined from a 20-month high on profit-booking, as warmer-than-normal temperatures arrived in key Mid-west and East Coast markets. Natural gas was trading close to 4.16 late on Monday when traders began selling off to book profits, pushing natural gas to trade at 4.053 this morning.