NEW YORK (Dow Jones)--New York crude oil futures fell Monday to a one-week low amid warm U.S. fall temperatures, continuing to trade within the $5-a-barrel range they have been stuck in for the past month.
The front-month December light, sweet crude contract on the New York Mercantile Exchange fell 95 cents, or 1.6%, to$58.64 a barrel, after trading as low as $58.45, its lowest since Nov. 3. Brent crude on the ICE futures exchange fell 79 cents to $58.94 a barrel.
December heating oil fell 2.94 cents, or 1.7%, to $1.6672 a gallon. Front-month unleaded gasoline fell 3.48 cents to $1.5279 a gallon and reformulated gasoline blendstock, or RBOB, fell 3.26 cents to $1.533 a gallon.
"The delayed start to colder winter temperatures in the U.S. northeast is contributing to further stockpiling at a time when OPEC's own inventories have reached multiyear highs," said Addison Armstrong, an analyst at TFS Energy Futures in Stamford, Conn. A weak close Friday, when crude fell more than $1 a barrel, means technical selling is a also a factor.
The National Oceanic and Atmospheric Administration last week predicted "warmer-than-average" temperatures in the northern U.S., the world's biggest heating oil market.
Man Financial, in its daily technical report, said the main trend is still price negative.
"We may see additional rally attempts in the low $60s, but a close over key $61.95 resistance is needed to highlight a larger bull drive," Man said. "The setback on Friday warns for defensive trade to reach for a test of support around last week's low" of $58.50.
Crude has traded between $56.55 and $61.70 a barrel since Oct. 3 as traders wait for further indications of the severity of the coming U.S. winter and to what extent the Organization of Petroleum Exporting Countries will implement its announced 1.2 million barrels a day of production cuts.
U.S. Energy Secretary Samuel Bodman said Monday he isn't concerned about the impact of the cuts.
"Based on what we see...I can't tell you that I'm dissatisfied," with implementation of the cuts, Bodman said on the sidelines of a conference at the Middle East Institute.
Analysts are expecting the cartel to not be able to put in place all of its planned cuts and are skeptical of the ability of countries such as Venezuela, Iran and Nigeria, who are not producing at current quotas, to further curb output at historically high prices.
Still, despite current warm weather, forecaster WxRisk.com is predicting normal to below-normal temperatures in the U.S. northeast for Nov. 18 to Nov. 27, which could support prices.
Source: Matt Chambers, Dow Jones Newswires; 201-938-2062; matt.chambers@dowjones.com.