Energy

Return to Article

Saudi Oil Minister Roils Crude

Chuck Marvin

Fossil fuel prices were down across the board Monday after Saudi Arabian Oil Minister Ali al-Naimi told reporters that the world petroleum market has strengthened since January and that there probably won't be further cuts in crude production by OPEC member countries when they next meet in March.

Contracts for light, sweet crude closed down $2.08 at $57.81 a barrel on the New York Mercantile Exchange. Natural gas lost 60 cents to $7.23 per million British thermal units. Heating oil dipped 8 cents to $1.65 a gallon, and gasoline was down 6 cents to $1.55 a gallon.

Regardless of the bearish comments regarding OPEC, energy prices will likely remain high until the Energy Information Agency releases new inventory numbers later this week, according to Edward Meir, energy analyst at Man Financial.

"This will be an important set of numbers, for it should not only reveal how distillates have fared during such a cold week [last week], but will also shed some light on whether OPEC's cutback's are finally having some impact on this side of the Atlantic," wrote Meir in an energy report.

Equity prices in the energy complex were broadly lower. Weaker crude oil prices were largely responsible for the slide, according to Amir Arif, senior vice president of energy research at Friedman Billings Ramsey in Arlington, Va.

Shares of energy provider NJ Resources(NJR Quote) were downgraded by Matrix Research to a sell rating from a buy, sending the stock 1% lower.

Shares of Exxon Mobil(XOM Quote) were down 1.1% to $74.41. Royal Dutch Shell(RDS.A Quote) was off 0.6% at $66.16, and Conoco Phillips(COP Quote) was 1.6% lower at $65.90.

As for the equities indices that track the energy sector, all were losing ground. The CBOE Oil Index and the Philadelphia Stock Exchange Oil Service Sector Index were lower by 1.5%. Halliburton (HAL Quote) and Schlumberger (SLB Quote) dropped 0.9% and 1.6%, respectively. The Amex Oil Index was losing 1.4%.