NEW YORK (TheStreet) -- U.S.-pegged oil prices rebounded to end in positive territory driven by spread-trading opportunities and the euro gathering some strength on news that China was in talks to buy Italian bonds.
West Texas Intermediate light sweet crude oil for November delivery rose 90 cents to settle at $88.31 a barrel and the November Brent crude contract fell 95 cents to $109.98, off session lows.
News that China is engaged in talks to buy Italian bonds to rescue the country from financial turmoil brought some support to the euro and stocks, which in turn resulted in some support for crude oil.
Later though, the euro and equities showed weakness again, but WTI "held onto gains, while the products and Brent" ... "remained in negative territory -- weighed down by worries of a Greek default," said Summit Energy analyst Matt Smith."The European-specific worries seem the only reason for the comparative strength in WTI -- its location." Citi Futures Perspective analyst Tim Evans said another driver of WTI's rebound Monday was traders taking advantage of spread trades, "with some traders figuring there's just better fundamental value buying crude oil for $88 rather than paying $112." "There may also be some willingness to bet that U.S. commercial crude oil stocks will fall further in the weeks ahead, although I think that's missing the forest for the trees," Evans said. Evans asserted that the global oil market just isn't tight right now and doesn't look like it will become tight anytime soon. "So the question to ask, isn't so much 'why buy WTI?' as it should be 'why buy oil at all?'" SEB analyst Bjarne Schieldrop had a bearish view on Brent crude oil for the day, but cautioned that temporary improvements in sentiment could quickly lift Brent back up again. New hurricanes entering the Gulf of Mexico's oil-producing region could also help nudge Brent crude prices higher. Natural gas futures for October delivery fell 3 cents to settle at $3.885 per million British thermal units on expectations that temperatures will cool over the next three days. "By the time we get to next weekend, it will clearly feel like autumn in New York City, its suburbs and most of New England, Pennsylvania and the Midwest," said Cameron Hanover analysts. "By Thursday, only Arizona, Texas and Florida look like their highs will reach into the 90s." Oil and gas companies closed in mixed territory. EOG Resources (EOG) rose 0.9% to settle at $86.11; Kinder Morgan Energy Partners LP (KMP) fell 1.3% to $67.90; Apache Corporation (APA) was down 0.4% to $94.71; Sunoco (SUN) rose 0.6% to $37.35; Anadarko Petroleum (APC) added 0.8% to $70.31; and Exxon Mobil (XOM) rose 1.2% to $71.84. Global Industries (GLBL) shares soared 51.1% to $7.78 after the oil and gas industry services provider agreed to be bought by Technip, the France-based provider of engineering services to the energy sector, for $8 a share in cash or roughly $937 million. The $8 a share acquisition price represents a 55% premium to Global Industries' closing share price on Sept. 9. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV