MW: Crude futures fall as tropical-storm concerns fade
By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude futures dropped Monday, as worries about a production-disrupting tropical storm eased and mildly positive macroeconomic data in the U.S. failed to lift markets.
Light, sweet crude for August delivery fell 67 cents to $78.20 a barrel on the New York Mercantile Exchange.
The contract had rallied Friday on concerns the storm would head for the Gulf of Mexico, and prices posted a weekly gain of 2.2%.
Tropical Storm Alex is moving slowly away from the Yucatan Peninsula and could turn into a hurricane later today or Tuesday, the National Hurricane Center said in an advisory.
"It doesn't look like it's going to be a threat to the (Gulf of Mexico's) refining areas," said Tom Bentz, an analyst with BNP Paribas in New York. Prices had a run-up on storm fears but were likely to give back at least some of these gains on Monday, he added.
On Sunday, a few energy companies evacuated oil production platforms as a precaution ahead of Alex.
"Of course with another two days before the storm is expected to make landfall there may be further swings, based literally on which way the wind is blowing," Tim Evans, an analyst at Citi Futures Perspectives, wrote in a report.
The market's reaction to Alex -- "ignore the threat for several days, react suddenly ... then drop back even before it makes landfall" could establish a pattern for "a long and choppy summer given that Alex was just the first named storm" of the season, he added.
Eighteen to 21 named storms are expected this year.
Energy traders also digested U.S. data showing that the savings rate for American households rose to the highest level in eight months in May, as personal incomes also rose. Read more about the latest economic data.
The data, however, was "ho hum," and not enough to give prices a lift, Bentz said.
Other energy products tracked oil, posting losses. Natural gas for August delivery retreated 11 cents, or 2.2%, to $4.80 per million British thermal units.
Reformulated gasoline for August delivery lost 3 cents, or 1.4%, to $2.14 a gallon.
In the currency markets, the dollar index (DXY 85.45, +0.13, +0.16%) gained 0.2% to 85.486. Stocks traded lower, seesawing as investors wondered whether the world leaders' pledge to reduce budget deficits would restore fiscal stability or cut into global growth. Read more about stocks.
