Natural Gas Futures Sink

Energy futures were sharply lower Monday at the New York Mercantile Exchange as bearish sentiment spread among crude and natural gas traders.

Oil was down $1.06 at $74.66 a barrel on the first day of front-month trading for the September contract. Reformulated gasoline fell 6 cents to $2.10 a gallon, and heating oil was 3 cents weaker at $2.06 a gallon.

Near-term natural gas was down 42 cents, or 6.5%, at $6.02 per million British thermal units.

Weighing on the complex were comments from OPEC research director Hasan Qabazard, who said in an interview that a crude price of $60 to $65 a barrel is "appropriate for consumers and producers, because it boosts means of investment in the oil industry in light of growing demand for oil in the coming years."

Also weakening crude markets was an announcement by Total (TOT Quote) that its Dalia production facility offshore Angola is fully back on line. The facility halted production late last week after losing the use of a large generator.

Meanwhile, natural gas prices were hammered as mild weather continues to deliver large injections into storage.

"Much-cooler-than-normal temperatures are prevailing and have prevailed this past weekend along the Eastern Seaboard, putting downward pressure upon electricity demand as the air-conditioning demands fall accordingly," Dennis Gartman, publisher of The Gartman Letter, wrote in a research report.