NYMEX Crude Futures Tread Water for Most of The Session

NYMEX crude futures tread water for most of the session Tuesday, settling nearly unchanged after news of improved investor confidence in Europe failed to spark buying. 

NYMEX February crude settled 4 cents lower at $93.15/barrel. On ICE, February Brent settled up 54 cents at $111.94/b. 

An uptick in the European Commission business and consumer survey gave support to the complex early on, analysts said. The investor confidence index showed an improvement to 87 in December, up from 85.7 and beating a forecast of 86.3. 

But Addison Armstrong, an analyst at Tradition Energy, expressed caution ahead of the market opening. 

"A slew of other European data, however, argues for a degree of caution," Armstrong said in a morning note. "Eurozone unemployment rose to a record 11.8% in November, while German factory orders fell more than expected and German exports sagged by 3.4%, the sharpest drop in more than a year." 

As the NYMEX settle approached, Tradition Energy broker Gene McGillian said crude and product markets were consolidating around three-month highs. 

"The market is treading water after finding support earlier from improved investor confidence in Europe," McGillian said. "But the fundamental picture is one of weak demand and ample supply. It really comes down to how things play out in Washington." 

McGillian said the recent rally to the $93-level and subsequent stall was a product of the mixed views taken of the "fiscal cliff" agreement reached by the US Congress last week. 

"But it wasn't completed and the rally is stalled, and we're still waiting on what will happen [in Washington]," he said. 

McGillian said products remained bid in part due to upcoming refinery maintenance programs. 

NYMEX February heating oil was the strongest element in the complex, settling 2.64 cents higher at $3.0585/gal. 

Analysts said seasonally low stocks and the possibility of colder weather across both the US and Northwestern Europe within the next few weeks was adding support to the distillate markets, despite gains in distillate inventories last week. 

RBOB settled 1.70 cents higher at $2.7944/gal. 

Meanwhile, the American Petroleum Institute is scheduled to release its weekly fuel stocks data after the markets close on Tuesday. Last week's data showed large gains in both distillate and product inventories, as strong refining margins and a drop-off in implied demand for both products led to a build in stocks across the country. Analysts polled by Platts anticipate a further 1.5 million barrel build in US crude stocks, a 1.5 million barrel build in US distillate stocks and a 2.6 million barrel build in US gasoline stocks during the week ending January 4.