Prices down 2.6% on day, up less than 1% on week; natural gas sinks
SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell under $60 a barrel Friday to close with a loss of nearly 3% for the session after the International Energy Agency trimmed its 2006 global oil-demand growth forecast, citing lower third-quarter demand from China and some industrialized nations. But crude's benchmark futures contract still managed to end the week with a modest gain as uncertainties surrounding Iran and the Organization of the Petroleum Exporting Countries' pledge to cut output remained. Crude for December delivery closed down $1.57 at $59.59 a barrel on the New York Mercantile Exchange. On Thursday, the contract closed above $61 a barrel at a two-week high, buoyed by data showing a smaller-than-expected rise in U.S. crude inventories in the latest week, a fifth week of declining distillate supplies. See full story. Prices ended the week with a 45-cent gain after closing out last week at $59.14. Among the oil products, December unleaded gasoline futures closed down 3.83 cents at $1.5627 a gallon and December heating oil finished down 4.9 cents at $1.6966 a gallon. Both contracts added pennies to their value this week. Overall, "market sentiment in the energy complex has improved on a combination of tightening world-energy supplies, strong world-energy demand and increasing indications that OPEC is leaning toward another production cut in December," Michael Fitzpatrick, an analyst at Fimat USA, said in a note to clients. But some of the steam came out of oil's rally after the Paris-based IEA said Friday that it now expects global growth of 1.1% to 84.5 million barrels of oil a day in 2006, down from an earlier forecast of growth of 1.2%. The organization said it's sticking with its 2007 forecast of growth of 1.7%. "Subdued growth in China possibly reflects stock shifts, rather than a lower-trend growth," the report said. "Lower temperatures in Europe and the U.S. could bolster demand following a relatively mild October." See the report's highlights. The IEA said oil inventories from members of the Organization for Economic Cooperation and Development, a group of industrialized nations, rose to the highest rate in Q3 since 1991, and that Kuwait is supplying full volumes to its Asian customers in December, according to Fitzpatrick. "These revelations were apparently enough to motivate holders of recently acquired length to cash out," he said. At the same time however, the report also "expected stronger Q4 energy demand and left the 2007 outlook unchanged," he said. Overall, "market perception is slowly changing because of growing evidence that surpluses are dwindling before the weather has turned consistently colder," Fitzpatrick said. On the broader political front, Iran's top nuclear negotiator said Friday that Tehran will review its relationship with the International Atomic Energy Agency -- the United Nations' nuclear watchdog -- if proposed Russian changes to a U.N. draft resolution on Iran are rejected. Ali Larijani made the comment as he arrived in Moscow for talks on Iran's nuclear program, the BBC reported on its website. The U.N. Security Council is threatening sanctions against Iran for its refusal to stop enriching uranium. But Russia has complained that the text of the resolution is too tough and wants it to be amended. Iran insists its nuclear activities are all aimed at generating power for civilian use; the West fears it's trying to develop nuclear weapons. Natural-gas futures lose ground Elsewhere in the energy complex Friday, natural-gas futures retreated from a two-week high after gaining nearly 2% in the previous session. December natural gas lost 16.1 cents, or 2%, to end at $7.794 per million British thermal units. On Thursday, the Energy Department reported a decline of 7 billion cubic feet for natural-gas supplies as of the week ended Nov. 3. That was the second-weekly decline of the heating season. See full story. But total inventories are "still at a record for this time of year," said Fitzpatrick. And "there is probably not much left of the rally that commenced in late September as temperatures in New York were expected to warm to above normal next week, while Chicago will average only slightly below normal." December natural gas was trading a few cents below last week's close of $7.884. Benchmarks tracking stocks in the oil-and-gas sectors fell Friday, with the Oil , , ) losing the most ground. See Energy Stocks. And in Friday's metals trading, gold futures retreated from a two-month high to close nearly $7 lower for the session, but up 90 cents for the week. See Metals Stocks. In other commodity-related news, experts praised the prospects for tungsten, a metal used in everything from light bulbs to bullets. See Commodities Corner. Gruss Ice __________________________________________________ Börsengewinne sind Schmerzengeld. Erst kommen die Schmerzen, dann das Geld...(A.K.)
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