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Oil Futures Climb to $62

Chuck Marvin

Energy futures were mixed after a volatile trading session Thursday as traders weighed new natural gas inventory figures against more softness in the world's equity markets.

After falling sharply early on, the April contract for light sweet crude finished the day a penny higher at $62 a barrel at the New York Mercantile Exchange. Gasoline climbed 5 cents to $1.90 a gallon, and heating oil finished even at $1.78 a gallon.

The near-term contract for natural gas closed 1 cent lower at $7.29 per million British thermal units.

The Dow Jones Industrial Average plunged more than 200 points in early trading before erasing most of the loss. Energy prices quickly chased equities lower. After stocks recovered later in the day, energy prices also stabilized and recouped their losses.

Energy commodities became coupled with equity prices on Tuesday when markets in Asia and the U.S. collapsed on signs that the Chinese economy might be slowing, according to Ed Meir, energy analyst at Man Financial. Energy prices will likely continue to be affected by stocks through next week, Meir wrote in a report.

News about growth or slowdowns in the global economy tends to have a large impact on commodity prices, because economies use commodities to build and expand. China is a major trading partner with the U.S., and an economic slowdown there would quickly be felt by U.S. markets.

Energy has largely been moving independently of equity prices throughout this winter heating season. Instead, energy has been trading on short-term news about weather, fuel inventories and geopolitical issues.

Meanwhile, the Energy Information Agency released natural gas inventory figures for the week ended Feb. 22. Gas stocks fell by 132 billion cubic feet, whereas the EIA was anticipating a draw of 139 billion cubic feet.

U.S. natural gas stores remain 14% higher than the five-year average level for the reported week.

Among actively traded securities, the iPath Goldman Sachs Crude Oil(OIL Quote) ETF was up 3 cents to $37.65.

Oil-services firm Newpark Resources (NR Quote) rose 3.6% at $6.32 after being upgraded by First Analysis Securities from equal-weight to overweight.

Hess (HES Quote) was upgraded by Friedman Billings from market perform to outperform and its price target was raised from $58 to $69. Shares of Hess added 23 cents to $53.19.

Natural gas-compression company Universal Compression Holdings (UCO Quote) was downgraded by Capital One Southcoast from buy to hold. Its stock was 54 cents lower at $66.36.