Crude futures dropped by more $2 a barrel on Monday as traders anticipated warmer weather later in the week and responded to weekend snowstorms in the Midwest that kept motorists off the road and planes grounded. Light, sweet crude for February delivery plunged $2.18 to $42 a barrel on the New York Mercantile Exchange in late morning trade, recovering from a low of $41.76. "That massive storm in the Midwest shut down gasoline demand and didn't do much for heating demand," said Ed Silliere, vice president of technical research at Energy Merchant Corp. in New York. Silliere said the weekend weather and expected warm spell later in the week come as a "stomach punch to anyone who was long," or betting that oil prices would rise.
"This is just a reaction to where the (London) market went on Friday," said Esa Ramasamy, oil editorial manager for energy reporting agency Platts in Singapore. The world's largest earthquake in 40 years, which hit parts of Asia on Sunday, was so far not a factor, traders said, though it could depend on how badly ports and shipping lanes are affected. |