Crude oil bearish in pre-Christmas trade

Source: Dukascopy Bank SA
© Scanpix/AP
Energy futures moved lower in pre-Christmas Monday trade amid growing likelihood that US lawmakers will not manage to agree on the next year's budget until January 1. Meanwhile, lower trading activity and lack of fundamentals may result in elevated volatility in the next sessions. The EIA weekly inventory report will be released on Friday instead of Wednesday due to Christmas holidays.

Crude and Brent oil retreated on weak demand for riskier assets as investors are cautious ahead of US tax cuts expiration on January 1. Solid greenback as well as eased tensions in the Middle East also weighed on oil futures. However, recent upbeat US figures coupled with an upgrade in global demand forecasts for 2013 capped losses of energy futures.

Natural gas tumbled on warm weather forecasts in the US. MDA Weather expects above-average temperatures in the US Northeast in the period between December 26 and January 7.

Heating oil came under notable selling pressure due to US demand worries. Warmer-than-normal temperatures as well as fiscal cliff concerns cut heating fuel demand prospects in the country.


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