Just Another Day At The Office For Oil

Published on Wednesday, 22 February 2012 17:52 Written by Todd Shriber

New York, February 22^nd (TradersHuddle.com) – What else does oil do these days besides go higher? That might be the sentiment of some traders out there as NYMEX-traded crude for April delivery gained a meager three cents to close at $106.28 a barrel. Per usual, Brent continued to outperform West Texas Intermediate. In London, Brent for April delivery added 1% to settle at $122.89 a barrel. The United States Oil Fund (NYSE: USO) was only higher by a penny on the day, but the ETF’s chart shows increasing strength.

Those looking for an obviously strong chart would do well to check out the United States Brent Oil Fund (NYSE: BNO), which surged 1.4% today on above average volume. That fund is up over 13% year-to-date. International Atomic Energy Agency officials were denied access to Iranian nuclear facilities, news that certainly provided a spark for oil’s bullish tenor today.

While Iran maintains its nuclear program is for domestic energy purposes, Israel and the U.S. have said all options are on the table in ensuring the Persian Gulf nation doesn’t acquire atomic weapons, Bloomberg reported. Said differently, Iran remains a wild card and that is good news for oil bulls.

In stock news, shares of Chesapeake Energy (NYSE: CHK), the second-largest U.S. natural gas producer, fell 2.4% on above average volume after the company delivered a disappointing set of fourth-quarter results Tuesday after the close. More importantly, Chesapeake will need to sell between $4 billion and 5.5 billion worth of assets next year to keep up with its cash needs; that’s on top of the $10 billion to $12 billion the company previously announced it would need to raise this year, Barron’s reported.

Oklahoma-based Chesapeake told investors it will curb natural gas production for a good portion of 2012 due to weak prices for that commodity. Dow components Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) were mixed on the day. Exxon settled higher while Chevron was in the red. OPEC member Nigeria, Africa’s top oil producer, signed a lease renewal accord with Exxon today and plans to do the same with Chevron and Royal Dutch Shell (NYSE: RDS-A) within a month.

Speaking of Shell, Europe’s largest oil company said today it would pay $1.56 billion in cash to acqurie Cove Energy to bolster production of liquefied natural gas. While natural gas may not be in high demand in the U.S., LNG in emerging markets, particularly Asian markets, is soaring as countries with booming economies look for cleaner alternatives to coal and oil.

Cove is active off the coast of Mozambique. Speaking of Mozambique, that’s a place where Anadarko Petroleum (NYSE: APC) is active as well. Anadarko continued its move higher today with a strong volume gain of 1.84%.