Oil wavers, while natural gas adds to losses

LONDON (MarketWatch) — Benchmark U.S. oil futures struggled for direction on Monday, failing to move off their losses from the end of last week, while natural-gas prices pounded lower, with some analysts offering a bearish forecast for the contract.

Crude oil for December delivery (CLZ3)  inched 2 pennies higher to $94.63 a barrel after a 1.8% drop Friday on the New York Mercantile Exchange. The contract lost 3.3% last week and settled at the lowest level since June 21 on Friday.

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"Oil prices are finding themselves hardly able at all to recoup any of the losses they suffered last week. This must be interpreted as a negative sign and points to further losses in the coming days — probably triggered by financial investors who are withdrawing from the oil market," analysts at Commerzbank said in a note.

The soft move for Nymex crude came as its European rival, December Brent crude (UK:LCOZ3) , moved higher, adding 24 cents, or 0.2%, to $106.15 a barrel.

Citi Futures called Nymex crude "the downside leader" within the global petroleum complex, given its "considerable head start in moving lower over the past six weeks."

"Abundant U.S. crude-oil production and reduced refinery runs for seasonal maintenance ... remain the dominant — and in our view, compelling — bearish market narrative," Citi Futures said in a note.

Meanwhile, December natural gas (NGZ13) tumbled 8 cents, or 2.4%, on Monday to $3.43 per million British thermal units, after a 1.9% loss during Friday's regular Nymex trade.

"Natural gas on the Nymex fell on follow-through weakness [and] ... spot Nymex gas has gapped below Friday's low print. In other words, it's been ugly for the bulls, but it could still get a whole lot uglier," the Schork Report wrote early Monday.

Citi Futures cited rising supply from the opening of new pipelines from the Marcellus Shale and an unchanged weather outlook as weighing on nat-gas prices.

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"Between the possibility of increased supply and the falling price, it looks as though we might have to wait for colder seasonal temperatures and the first storage withdrawal or two before prices swing higher again," Citi Futures said.

In other energy-futures trade, December gasoline (RBZ3)  slipped 0.2% to $2.54 a gallon, while December heating oil (HOZ3)  edged up 0.1% to $2.89 a gallon. The pair fell 1.6% and 2.4%, respectively, on Friday.