Oil Steady, While Natural Gas Adds to Losses

Benchmark U.S. oil futures held steady in electronic trade Monday, failing to move off their losses from the end of last week, while natural-gas prices pounded lower, with some analysts offering a bearish forecast for the contract.

Crude oil for December delivery CLZ3 +0.17%  inched a penny lower to $94.60 a barrel after a 1.8% drop Friday on the New York Mercantile Exchange.

The move for Nymex crude came despite a modest gain for its European rival, December Brent crude UK:LCOZ3 +0.43% , which added 29 cents, or 0.3%, to $106.20 a barrel.

Citi Futures called Nymex crude “the downside leader” within the global petroleum complex, given its “considerable head start in moving lower over the past six weeks.”

“Abundant U.S. crude-oil production and reduced refinery runs for seasonal maintenance … remain the dominant — and in our view, compelling — bearish market narrative,” Citi Futures said in a note.

Meanwhile, December natural gas NGZ13 -2.16%  tumbled 9 cents, or 2.5%, on Monday to $3.43 per million British thermal units, after a 1.9% loss during Friday’s regular Nymex trade.

“Natural gas on the Nymex fell on follow-through weakness [and] … spot Nymex gas has gapped below Friday’s low print. In other words, it’s been ugly for the bulls, but it could still get a whole lot uglier,” the Schork Report wrote early Monday.

Citi Futures cited rising supply from the opening of new pipelines from the Marcellus shale and an unchanged weather outlook as weighing on nat-gas prices.

“Between the possibility of increased supply and the falling price, it looks as though we might have to wait for colder seasonal temperatures and the first storage withdrawal or two before prices swing higher again,” Citi Futures said.

In other energy-futures trade, December gasoline RBZ3 +0.20%   rose marginally to $2.55 a gallon, while December heating oil HOZ3 +0.40%  edged up 0.1% to $2.89 a gallon. The pair fell 1.6% and 2.4%, respectively, on Friday.

Source: Marketwatch