MW:Oil futures drift lower as hurricane nears U.S.
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — U.S. benchmark crude-oil futures drifted lower in electronic trading Monday in Asia, with monster storm Hurricane Sandy on track to reach the U.S. East Coast early this week.
Crude oil futures CLZ2 -0.44% for December delivery lost 27 cents to trade at $86.01 a barrel in electronic trading on the New York Mercantile Exchange, which was slated to close Monday and likely beyond, due to the storm. Read: U.S. exchanges to close Monday.
On Friday, Nymex crude oil futures settled 23 cents higher at $86.23 a barrel.
‘It was pretty clearly the strength of the heating-oil market off the forecast for Hurricane Sandy to sweep up the East Coast that pulled the rest of the petroleum complex higher,” said Timothy Evans, strategist at Citi.
Still, “Brent crude oil, as the market more tightly linked with the New York Harbor delivery product futures, was the chief beneficiary of this indirect support,” Evans said.
However, Brent crude futures also slipped a bit on Monday, trading down 30 cents at $109.25 a barrel.
Friday’s mild gain for Nymex crude oil futures pared losses to about 4% over the week after some mixed economic data.
“The recent pattern has been one of a market sandwiched between a background of poor economic prospects on the one hand, and both relatively supportive global fundamentals and geopolitical complexity on the other hand,” said commodity strategists at Barclays Capital.
“Any consideration of macroeconomics seems still be fairly depressive, even if the edge seems to be coming off some of the darker fears on a hard landing in China,” they said.
Monday’s oil-future losses in Asia came even as the dollar retreated slightly. Commodities priced in U.S. dollars, such as crude oil, tend to trade inversely to the greenback, as gains for the dollar make prices more expensive for holders of other currencies.
The ICE dollar index DXY +0.17% , which measures the U.S. dollar against a basket of six other major currencies, reached 80.092 on Monday, up from 80.046 in late North American trading Friday.
However, the picture was a bit brighter around the wider energy complex, with November heating oil HOX2 +0.78% up 3 cents at $3.12 a gallon, and natural gas for delivery in November NGX12 +0.15% up 2 cents at $3.42 per million British thermal units.
November gasoline futures RBX2 +1.03% rose 3 cents to $2.73 a gallon. The November contracts are due to expire after the close on Wednesday.
Sarah Turner is MarketWatch's bureau chief in Sydney.
