Updated from 11:56 a.m. EDT
Crude prices inched higher Monday despite the weakening of tropical storms Franklin and Gert.
Crude for September delivery closed up 37 cents to $59 on Nymex. Gasoline futures fell 2 cents to $1.69 a gallon.
Gert, which caused some minor supply halts from Mexico, weakened substantially before coming ashore near Tampico with sustained winds of 35 mph. Franklin, meanwhile, is reportedly losing steam as it hovers in the Atlantic southeast of Florida.
Oil futures remain well off their all-time high of $62.10 a barrel, reached on July 7, as data showing global oil consumption growth was waning overshadowed concerns over tight refining and production capacity.
Prices dropped Thursday after China loosened the yuan's peg against the dollar, an action that could crimp Chinese economic growth and oil demand.
As for the spreads between future and front month contracts, the October crude contract has traded at a recent premium of 61 cents to 78 cents over the front month contract throughout July, indicating that crude inventories aren't as ample as they have been earlier this spring (the premium generally narrows when spot demand is greater). The June-July spread was about $2 in late May, when oil prices tanked and U.S. inventories hit a peak of over 330 million barrels.
"The present contango says we have a fairly balanced situation between a moderate downtrend in the DOE stocks and the more
bearish fact that inventories are still 19 million barrels higher than last year," said Tim Evans, senior market analyst at IFR Markets.
The latest inventory report showed crude levels fell to roughly 320 million barrels, but a more bearish picture of rising distillates inventories capped oil prices further.
Last week's blasts in London's subway system and Saturday's terrorist attacks which killed dozens in the Egyptian resort city of Sharm al-Sheikh fueled concerns over a worldwide decline in travel and tourism. That also pressured prices.
But range-bound oil hasn't stopped energy stocks from rallying, as another strong earning season began last week with positive news form oil service giants
Analysts are also upbeat about this week's earnings from the major integrated oil companies. Dan Barcelo, an analyst at Banc of America, said the sector seemed posed for another "bumper quarter," as high commodity prices and strong refining and marketing margins will lead the majors to an average earnings-per-share gain of 46%, year-over-year.
Among the U.S. producers, Barcelo believes the best performer will be
, with a 55% increase in earnings results compared to the same time a year ago.
income will rise 47% compared to last year, according to Barcelo, as it is more focused on refining and marketing.
Companies such as
will post weaker results compared to the rest of the group. They're biased toward exploration and production, Barcelo said.
, among the first to report on July 26, are up 1.3% to $66.61.
gained 1%, and
Royal Dutch Petroleum
( RD) fell 0.3%.
Elsewhere in earnings news, the refining and chemicals company
said Monday that net income for its fiscal third-quarter ended June 30 was $231 million, or $3.09 a share, compared with $161 million, or $2.26 a share, a year ago, driven by improving margins. Ashland's results beat Wall Street's expectations by nearly $1, according to Thomson Financial.
The company said in a release that operating income from refining and marketing was $290 million for the June 2005 quarter, 41% higher than the same time a year ago. Shares rose 81 cents, or 1.3%, to $62.8.
Among drillers, Michael LaMotte, analysts at J.P. Morgan cut
to underweight from neutral based on valuation. The deep sea driller "has less upside over the next few months than its offshore drilling peers," LaMotte wrote in a note, but raised its second-quarter earnings estimate to 32 cents a share, from 29 cent.
The analyst also raised
to neutral from underweight citing the company as the greatest beneficiary from the tightening in rig supply in the Gulf of Mexico, as it has 37 rigs under construction or on order. LaMotte raised its full year earnings estimate to $1.59 from $1.38. Shares rose 0.9% to $32.36.