ROFL!
Dumb question on my part!
By Myra P. Saefong, CBS.MarketWatch.com Last Update: 3:50 PM ET Dec. 3, 2004
SAN FRANCISCO (CBS.MW) -- Crude futures closed under $43 a barrel at an almost three-month low Friday, logging a loss of 14 percent for the week amid rising U.S. distillate and crude supplies and growing expectations that OPEC won't agree to cut its output quota next week.
Natural-gas prices lost more than 21 percent for the week with traders reassured by overall U.S. stock levels.
"The lack of a snap back to the upside after the big Wednesday-Thursday drop [in oil prices] suggest that the market's rubber band hasn't just been stretched -- it's broken," Tim Evans, a senior analyst at IFR Markets, said in an afternoon update.
Crude for January delivery fell to a low of $42.05 per barrel on the New York Mercantile Exchange before closing at $42.54, down 71 cents for the session. It was its lowest settlement level since Sept. 10.
The contract lost $6.90 for the week, after closing last week at $49.44, on Nov. 24, before the Thanksgiving holiday.
Among the oil products, January heating oil fell 2.13 cents to close at $1.2359 a gallon, down 15.7 percent for the week. January unleaded gas lost 0.65 cent to end at $1.1349 a gallon, down 13.5 percent for the week.
Despite the losses for the week, oil prices could find support. OPEC may now have the "ammunition it needs to call for an across-the-board cut in production," said Kevin Kerr, president of Kerr Trading International. He added that members are "pumping more and making less [and] they hate that."
Cartel members will meet next Friday in Cairo to decide whether any changes to output are necessary to better balance supply and demand.
OPEC musings
Comments from Nigeria Thursday implied that the African nation is concerned a production cut would send the wrong signal to the market, according to Michael Fitzpatrick, an analyst at Fimat USA.
At the same time, however, Saudi Arabia has suggested that it hasn't ruled out an output cut, he said.
Also, OPEC President Purnomo Yusgiantoro said Thursday that the organization will likely decide to keep its current production quota of 27 million barrels, excluding Iraq.
Still, Iran and Venezuela have called on the cartel to cut production quotas when the Egyptian summit convenes. The market estimates that actual output is running about 1 million barrels above the current quota.
Oil prices could "recoil aggressively" under the slightest threat of an OPEC cut, or any other notable supply threat, Fitzpatrick said.
Contributing to price pressure this week were Wednesday's reports of higher distillate and crude supplies for the week ended Nov. 26. See full story.
Natural gas falls
Natural-gas futures posted a more than 21 percent loss for the week, with storage levels seen as more than adequate for now.
From here, Kerr believes prices will "see a bit more of a falloff," but then prices will "bounce once cold weather hits."
January natural gas closed at $6.796 per million British thermal units, down 1.5 cents for the session, and down $1.84 from last Wednesday's closing level.
It fell more than 8 percent on Thursday alone after the Energy Department said supplies for the week ended Nov. 19 didn't fall as much as previously reported. See full story.
Defying weakness among the energy futures Friday, energy shares edged higher, with the Philadelphia Oil Service Index ($OSX: news, chart, profile) leading the gains among the sector trackers. See Energy Stocks.
Gold futures closed near $458 an ounce, up more than 1 percent for the week following fresh lows in the U.S. dollar. See Metals Stocks.
The Reuters/CRB index, a broad measure of commodity futures markets, was up 0.2 percent at 284.4 points.