Oil tumbled as France signaled that governments are about to reach an agreement on a release of oil from emergency stockpiles. This overshadowed speculations that sanctions against Iran will be tightened. The front-month contract for WTI crude oil slumped to 123.13, the lowest level since mid-February, before settling at 102.78, down -2.0%, while the equivalent Brent crude contract plummeted -1.43% to 122.39 at close.
French Prime Minister Francois Fillon stated that there are 'good' chances' for the US and European to release strategic reserve and it's reasonable for expect more oil will be pumped. Meanwhile, the IMF pledged to act if supplies are disrupted. Oil prices have risen over the past few months amid concerns that supply will be affected as the US and Europe stepped up sanctions against Iran, the OPEC's second largest oil exporter, so as to halt its nuclear development. Fillon's comments upstaged speculations that pressures from the West may be intensified to military conflict as Israel prompted for tougher actions.
In China's oil sector, Petrochina announced acquisition plans ramp up output and expand into overseas markets. According to Chairman Jiang Jiemin, while, the current focus is still 'on the Chinese market, but in the long term, we will expand outside China'. The 'large scale' acquisitions involve at least $60B this decade in global oil and natural gas assets, increasing the proportion of overseas output to half of the total.
On the dataflow, US initial jobless claims fell -5K to 359K in the week ended March 24. Yet, the drop was due to an upward revision in the last week. Figures over the past 2 months were also revised higher. The 4-week moving averages for February and March were both 369K with the figure during the March survey week was initially reported at 355K. Today in the NY session, the Chicago PMI index probably dipped -1 point for 63 in March while the university of Michigan confidence index might have edged higher to 74.8 in March from the previous reading of 74.3.