Oil Prices Fall Modestly
West Texas Intermediate (WTI) and Brent crude oil prices finished lower Monday.
WTI for January delivery shed 18 cents to settle at $59.02 per barrel. The benchmark traded Monday within a range from $58.23 to $59.25.
February Brent also posted a modest loss, declining 14 cents to end the day at $64.25 per barrel.
“Both WTI and Brent cannot seem to trade up,” said Tom McNulty, Houston-based managing director with Great American Group.
McNulty commented that production cuts announced Friday by the OPEC+ alliance will fail to overcome the following three factors:
- Negative global trade data
- The “certainty” that alliance members will cheat on their production quotas
- The likelihood that the large debt burdens of North American oil producers will cause the region’s crude output to rise, regardless of oil prices.
The theme of small price movements extended to reformulated gasoline (RBOB). The January RBOB contract price edged slightly upward Monday, gaining nearly one cent to settle at $1.65 per gallon.
The price of Henry Hub natural gas, however, showed a more dramatic change during Monday’s trading. January gas futures lost 10 cents to close at $2.23 – a loss of more than four percent against Friday’s settlement price.
McNulty observed that Monday’s significant drop in the natural gas contract price shows “how sensitive it is to a warm weather forecast, when we have so much supply.”
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