Selling picked up momentum after Royal Dutch Shell announced it would boost production at a Nigerian oil platform shuttered by violence last year. But trading volumes were low as many traders were off for Columbus Day and a national holiday in Japan.
After rallying 20 percent from late August to late September, oil futures have settled into a trading range around $80 a barrel. Daily prices have been volatile at times as investors have debated whether demand for crude and petroleum products will be strong enough in the fourth quarter to support $80-a-barrel oil. While some analysts point to ebbing demand for gasoline and forecasts for high temperatures through December as signs the oil, gasoline and heating oil markets are adequately supplied, others say low heating oil inventories and refinery activity shows supplies are tight.
As a result, some analysts believe oil will fall to $65 a barrel or lower, following a typical seasonal pattern.
Others expect futures to break that pattern and push toward $90 a barrel.
Light, sweet crude for November delivery fell $2.20 to settle at $79.02 a barrel on the New York Mercantile Exchange. That was its lowest close in nearly a month.
Gasoline for November fell 4.91 cents to settle at $2.0002 a gallon, while heating oil fell 6.39 cents to settle at $2.1596 a gallon.
Natural gas futures fell 22.7 cents to settle at $6.846 per million British thermal units, extending Friday's 33.9 cent decline.
Analysts say investors are selling off a "storm premium" that had been built into natural gas prices; the market now believes that no tropical weather systems pose a serious threat to critical gas and oil infrastructure in the Gulf of Mexico.
Via: Chron
