Commodity Corner: Oil Declines on Saudi Official's Remarks

Comments Monday from a major world energy industry official led to a nearly $2.00 decline in oil prices.

March crude oil hit an intraday low of $87.27 a barrel Monday before ending the day at $87.87. In contrast, Friday's settlement price was $89.11. Monday's dramatic price swing followed remarks given at a Riyadh conference by Saudi Arabian Oil Minister Ali al-Naimi, who asserted that the global economic recession is over. Consequently, he voiced his opinion that oil demand should rise this year and that oil prices should be less volatile in 2011 compared to last year.

Investors interpreted al-Naimi's comments as an indication that Saudi Arabia is willing to open its spigot of crude oil further to prevent prices from increasing dramatically.

Front-month crude peaked at $89.63 Monday.

Despite the Arctic blast blanketing the Midwest, Northeast, and other parts of the U.S., natural gas for February delivery fell 16 cents to settle at $4.58 per thousand cubic feet. The bearish sentiment stemmed from the belief that natural gas inventories are advancing toward a March peak.

Natural gas traded within a range from $4.56 to $4.88 Monday.

February gasoline lost a nickel to settle at $2.41 Monday. It fluctuated from $2.41 to $2.48.