Oil Plunges Anew

Energy prices sank Thursday to another 19-month low as colder winter weather failed to provide any relief from a multisession pullback.

Nearby contracts for light sweet crude closed down $2.14, or 4%, at $51.88 a barrel on the New York Mercantile Exchange. Natural gas was 46 cents lower at $6.29 per million British thermal units. Heating oil was down 5 cents at $1.48 a gallon, and gasoline was losing 4 cents at $1.39 a gallon.

"There is just no reason to feel very bullish right now," says Gary Mead, an analyst at Virtual Energy in London. "OPEC cuts have not taken effect, last year's hurricane season passed without incident, and supplies seem pretty secure."

Longer-term Mead sees increasing reliance on biofuels, especially in the U.S., now that energy independence has become a political issue. "From what I'm reading, there is a real will to change," he says.

Elsewhere, the effects of the recent warmer weather were still rippling through the system. Underground stores of natural gas remain above the 3 trillion cubic feet level, compared to 2.6 trillion a year ago, the Energy Information Administration reports.

As for stocks, at least one money manager sees opportunity among the oil gloom.

"From a technical standpoint, the trend is still lower in the near term," says Brian Hicks, co-portfolio manager of the (PSPFX Quote)U.S. Global Investors Global Resources Fund. "But at some point we should get support from OPEC," which will be bullish for prices.