Crude Ends Just Below $60

Updated from 2:37 p.m. EST

Crude prices closed just below $60 Tuesday as the streak of unusually warm weather continued for much of the U.S.

December crude closed up 24 cents to $59.71 a barrel, following Monday's $1.11 drop. Unleaded gasoline climbed about half-a-cent to $1.56 a gallon, while natural gas futures fell 8 cents to $11.79 per million British thermal units. Heating oil fell nearly a penny to $1.77 per gallon.

"The market has shown its resilience," said Paul Boland, a futures broker at Alaron Trading, "Also, there's news of colder weather coming in next week, which will cause things to go higher."

Trading was also muted ahead of the Energy Department's weekly petroleum inventory report, which comes out on Wednesday.

Phil Flynn, senior market analyst at Alaron, said traders are currently focused on the warmer-than-normal weather for the rest of the week and a potential build in distillates in Wednesday's inventory report. After that, he said, traders will be watching a massive cold air front in Canada that could bring freezing temperatures to the Midwest and Northeast in time for Thanksgiving.

"There's a potential for a big change in the weather in the coming days," Flynn said.

The restart of storm-damaged refineries in the Gulf of Mexico continues. The U.S. Minerals Management Service said Tuesday's shut-in oil production was 738,617 barrels of oil per day, the equivalent to 49.24% of the gulf's daily oil production. The shut-in gas production was 4.122 billion cubic feet per day, the equivalent to 41.23% of the gulf's daily gas production.

In company news, Transocean(RIG Quote), the world's largest offshore drilling contractor, posted third-quarter net income of $170.4 million, or 50 cents a share, on revenue of $762.6 million. This compares with $154.9 million, or 47 cents a share, on revenue of $651.8 million from a year ago. The Houston-based company said it expected hurricane damage to have a $40 million to $50 million impact on fourth-quarter revenue and operating costs.

In addition, J.P. Morgan upgraded Transocean from underweight to neutral. Denver-based natural gas company Western Gas Resources(WGR Quote) posted third quarter net income of $67.7 million, or 88 cents a share. This compares to net income of $35.1 million, or 47 cents a share, a year ago. Revenue rose to $1.05 billion from $718.3 million a year ago.

Houston Exploration(THX Quote) said it intends to sell its offshore operations and become a pure onshore U.S. gas producer. The company said it will divest of its entire Gulf of Mexico asset base and expects to open a data room to qualified bidders in January 2006. Historically the company's gulf production has accounted for about 40 percent of its total production.

Shares were rising for some of the other big energy market players. ConocoPhillips(COP Quote) was up $1.05 to $66.80. Chevron (CVX Quote) was up 55 cents to $57.95. ExxonMobil(XOM Quote) was up 63 cents to $57.44. Burlington Resources(BR Quote) was up 63 cents to $70.20.