OIL FUTURES: Nymex Crude Nearly Flat As Supply Concerns Ebb

NEW YORK (Dow Jones)--Crude futures traded nearly flat Friday after a sharp retreat in the previous session, as worries faded about supply shortages related to the unrest in Libya.

Light, sweet crude for April delivery recently traded 4 cents lower at $97.24 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 50 cents higher at $111.86 a barrel.

Oil prices plummeted Thursday from two-and-a-half year highs above $103 after Saudi Arabia and a group of major oil-consuming nations said there is plenty of oil on hand to replace supplies halted from Libya.

The North African country remains locked in violence as Libyan leader Moammar Gadhafi attempts to crush a popular uprising against his 42-year rule.

The International Energy Agency, which represents many of the world's largest oil-consuming nations, said the unrest has curtailed up to 750,000 barrels a day of Libya's 1.6 million barrels a day of oil production. The agency said it would "continue to closely monitor" the situation and could tap strategic stocks when necessary.

Saudi officials are in talks to supply refineries with oil from their spare production capacity as well, which could make up for any short-term disruptions.

"The crucial question remains whether the Gadhafi regime will be toppled within a couple of days with some reasonable succession scheme, or whether the country is heading towards a prolonged civil war," wrote JBC Energy analysts.

While oil investors remain glued to reports out of Libya, analysts said actions by Sauda Arabia or the IEA to help with any disruptions could tame the recent price surge. The ICE raised margin requirements Friday for its Brent futures contracts, pushing speculative traders to sell some contracts to lock in profits.

"We're seeing a little bit of profit taking," said Carl Larry, an analyst with Oil Outlooks and Opinions. "A lot of people were making money, and now is the time to reduce positions."

Brent futures set a new record for volume on the ICE Thursday, topping a record set Wednesday. Volume in Nymex-traded futures is also elevated.

Brent, the European benchmark, continues to trade at a sharp premium to its U.S. counterpart. The gap between Brent and Nymex-traded West Texas Intermediate crude was recently above $14, due to a large supply glut in the U.S. that has kept a lid on prices in recent weeks.

U.S. crude oil stockpiles rose by 800,000 barrels last week, according to data released Thursday by the Department of Energy.

Front-month March reformulated gasoline blendstock, or RBOB, recently traded 1.43 cents, or 0.5%, higher at $2.7310 a gallon. March heating oil recently traded 1.25 cents higher at $2.8898 a gallon.

(Source: http://online.wsj.com/article/BT-CO-20110225-708399.html)