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Oil prices slide as traders sell to lock in profits

Oil prices slide as traders sell to lock in profits

Oil futures retreated Monday in light holiday trading as investors sold contracts to lock in profits from the previous session's rally.
With little in the way of news to spark buying or selling, oil prices will likely trade in a range for the duration of the holidays, analysts said.
"We're going to bounce around between $90 and $95 a barrel," said Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC.
Light, sweet crude for February delivery fell 69 cents to $92.62 a barrel on the New York Mercantile Exchange. Prices rose more than $2 on Friday after the government reported consumer spending jumped more than expected in November, raising hopes that the economy will weather the crisis roiling credit markets and that demand for oil and gasoline will strengthen.
Trading has been light since late last week, when investors began leaving for the holidays. Light volume can distort price moves, analysts said. Nymex closes an hour earlier Monday, at 1:30 EST (1830 GMT), in observance of Christmas Eve. Markets in the U.S. and many other countries will be closed Tuesday for Christmas.
Crude futures have since retreated as OPEC boosted supplies and several forecasters cut demand predictions. But in recent weeks, prices have held generally to a range between $87 and $93, leading some analysts to conclude some investors may be poised to make another push for $100 a barrel in the new year.
But there is little consensus on that theory. Other analysts maintain that oil's fall rally was driven more by speculative buying than the underlying fundamentals of supply and demand. Analysts in this school of thought believe oil's true value is closer to $50 or $60 a barrel.
"Although we cannot predict the highs and lows of oil prices, we are more certain that volatility will continue and the current bubble will eventually burst," said Fadel Gheit, an analyst with Oppenheimer & Co., in a recent research note.
Other energy futures also fell Monday. January heating oil futures fell 3.76 cents to $2.5715 a gallon on the Nymex, while January gasoline futures fell 2.05 cents to $2.359 a gallon.
January natural gas futures dropped 18.3 cents to $7.007 per 1,000 cubic feet.
In London, February Brent crude fell $1.05 to $91.41 a barrel on the ICE Futures exchange.


Updated : 2021-04-16 22:53 GMT+08:00