Crude Sees Rally Vanish

Oil futures rallied past $73 at one point Monday, but the buying momentum faded in the afternoon as the end of the session drew near.

September light sweet crude was recently down 22 cents at $71.25 a barrel at the New York Mercantile Exchange. Reformulated gasoline was losing 2 cents at $1.93 a gallon, and heating oil was little changed at $1.97 a gallon.

The near-term natural gas contract slipped 5 cents to $6.77 per million British thermal units.

Gene McGillian, an analyst at TFS Energy Futures, said the positive open in the stock market was mostly responsible for the early climb, while reports of a large storm brewing off the west coast of Africa also played a role in the upward move.

However, as equities moderated and speculation began to build that the system probably wouldn't threaten the U.S. oil-drilling infrastructure, prices pulled back. The storm is currently called "Tropical Depression 4" by the National Weather Service. According to a public advisory, the depression could become a tropical storm in the next 24 hours.

Energy prices can rise when traders begin to plan for the possibility of bad weather. The peak of hurricane activity in the U.S. usually lasts from the end of August through the end of September. Should the system start tracking toward the Gulf of Mexico, energy futures could draw renewed buying pressure.

Meanwhile, stocks in the sector were mostly higher. The CBOE Oil Index rose 0.9% to 733.33. ConocoPhillips (COP Quote) climbed 1.9% to $79.70, while Exxon Mobil(XOM Quote) slipped 0.7% to $83.89.