Crude Slides Again

Updated from 11:53 a.m. EST

Crude prices fell below $58 Thursday on high oil inventories, warm weather forecasts and speculation that OPEC members are not uniformly trimming production.

Light, sweet crude for December delivery lost 83 cents to close at $57.88 a barrel. Unleaded gasoline and heating oil each gave back 1 cent, to $1.45 a gallon and $1.63 a gallon.

Natural gas gained 10 cents to settle at $7.81 per million British thermal units after stockpiles dropped last week in the U.S. Energy Department's weekly inventory report. Inventories inched down by 9 billion cubic feet to 3.45 trillion cubic feet. There is now 9% more natural gas in storage than last year and the five-year average.

Analysts in a Bloomberg poll had expected a decrease of 10 billion cubic feet last week as temperatures dipped and heating demand increased. Natural gas is used by some utilities to generate electricity.

But over the next week, warm temperatures are expected to cover much of the country, according to the National Weather Service. Warm temperatures translate into lower heating demand, and a drawdown in heating oil and natural gas.

Oil prices have been unable to hold any gains in the past week, thanks to plentiful supplies and growing doubt that members of the Organization of the Petroleum Exporting Countries will uniformly trim their production by a total of 1.2 million barrels per day this month. BP's(BP Quote - Cramer on BP - Stock Picks) Prudhoe Bay oil field in Alaska, the country's biggest, returned to full production of 400,000 barrels last week and the reopening of two Royal Dutch Shell's(RDS-A Quote - Cramer on RDS-A - Stock Picks) oil facilities in Nigeria also helped keep a lid on prices.

Thus far, only five of the group's 11 members have publicly said they will trim output to help prop up oil prices. But Nigeria has said it will increase exports, Indonesia will maintain current levels, and Iran, though it intends to trim exports to European customers, will maintain exports to its Asian refining customers. Members are loath to reduce production and lose millions in oil revenue.

The group, which pumps about 40% of the world's crude, is set to meet Dec. 14 in Abuja, Nigeria, to discuss another decrease. The oil minister of Kuwait, though, called on OPEC to stave off additional cuts Thursday.

"The market needs to translate the cuts we made in Doha last month before we can make a decision in Abuja," Sheikh Ali-Jarrah al-Sabah told Bloomberg.

At an October meeting in Doha, Qatar, OPEC decided to trim output to push oil prices back above $60. The move seemed abrupt to the markets, because as recently as September, cartel members had said they would maintain record production levels of about 28 million barrels per day.

OPEC waffling and high supplies are combining to keep a lid on rising oil prices. In the U.S. Energy Department's weekly inventory report Wednesday, crude inventories rose last week by 2 million barrels after the Louisiana Offshore Oil Port, one of the country's largest import terminals, reopened after a three-day closure. Supplies of oil are rising because many refiners have shuttered units for routine maintenance ahead of the winter heating season.

Stockpiles of distillates, which include heating oil, fell by 2.7 million barrels, and gasoline dropped by 2.8 million barrels. Still, supplies are 2% to 13% higher than last year, and refiners are gradually returning to full production.

Last week, refining capacity was 88.9%, up from 86.2% the previous week.

Meanwhile, shares of exploration and refining companies was falling less than 1%, led by Sunoco(SUN Quote - Cramer on SUN - Stock Picks), Valero Energy(VLO Quote - Cramer on VLO - Stock Picks) and Total(TOT Quote - Cramer on TOT - Stock Picks).

Sunoco's net income increased 7% to $351 million during the third quarter, thanks to strong refining and retail gasoline margins. Sales rose to $10.5 billion, up from $9.3 billion last year. At $2.76 per share, earnings were up from $2.39 per share a year ago and well ahead of the consensus estimate of $2.19 per share.

Chevron(CVX Quote - Cramer on CVX - Stock Picks), Anadarko Petroleum(APC Quote - Cramer on APC - Stock Picks), Occidental Petroleum(OXY Quote - Cramer on OXY - Stock Picks) and Repsol(REP Quote - Cramer on REP - Stock Picks) were posting increases among members of the Amex Oil Index.

Oil field service companies were following natural gas prices lower, shedding about 1% on the Philadelphia Oil Service Index. Global Industries(GLBL Quote - Cramer on GLBL - Stock Picks), GlobalSantaFe (GSF Quote - Cramer on GSF - Stock Picks) and Tidewater(TDW Quote - Cramer on TDW - Stock Picks) were leading declines, down by as much as 9%.

Offshore oil and natural gas driller Transocean(RIG Quote - Cramer on RIG - Stock Picks) saw net income soar to $309 million, or 96 cents per share, during the third quarter, up from $170.4 million, or 50 cents a share. Revenue soared 35% to $1 billion on higher rig rates and rentals.

Transocean shares were last up 2% to $72.72.

Natural gas pipeline operators and drillers were inching down 0.5% on the Amex Natural Gas Index. EOG Resources(EOG Quote - Cramer on EOG - Stock Picks), Pogo Producing(PPP Quote - Cramer on PPP - Stock Picks) and Noble Energy(NBL Quote - Cramer on NBL - Stock Picks) were down the most, about 1.5% each.

During the third quarter, higher sales margins and production volumes of natural gas boosted Williams Companies'(WMB Quote - Cramer on WMB - Stock Picks) profits by 2,314% to $106.2 million, or 18 cents per share. Sales were $3.3 billion, up from $3.1 billion.

Shares of Williams were recently rising by 1 cent to $24.35.