Oil futures settled higher on Thursday as an agreement to halt months of deadly fighting in Ukraine helped ease concerns over Russian oil demand, but the continuing supply glut in the U.S. kept price gains in check. Natural-gas futures, meanwhile, suffered their first decline in four sessions as traders showed disappointment over the size of the latest decrease in U.S. inventories. Crude-oil futures for delivery in March rose $2.37, or 2.4%, to settle at $51.21 a barrel on the New York Mercantile Exchange.
French and German leaders brokered a renewed deal to end Ukraine’s 10-month conflict with Russia-backed separatists. “In short, the cease fire in Ukraine with Russia will lower the chances of new sanctions on Russia, which should help the growth outlook for the region,” said Phil Flynn, senior market analyst at Price Futures Group. “This comes against a backdrop of massive central bank easing, which should help kick-start some demand,” he said. “While the oil market still has some very bearish supply issues to overcome from a price standpoint, the action is looking more like a bottom.” Nymex oil prices had tallied declines of nearly 8% over the past two trading sessions.
On its final trading day as a front-month contract on London’s ICE Futures exchange, March Brent crude rose $2.39, or 4.4%, to end at $57.05 a barrel. News that U.S. oil supplies touched a record high continued to cast a shadow on the market. U.S. crude stockpiles rose more than expected, by 4.9 million barrels to 417.9 million barrels, in the week ended Feb. 6, the U.S. Energy Information Administration reported Wednesday.