mineral exploration project – commodity prices – mining stock- trade and market

After sliding about 8% last week, oil prices ticked back near $67 Monday, tracking a rise in equities.

Crude oil for November delivery rose 82 cents and settled at $66.84. In midday trading, prices topped $67, rising 2%.

“The main catalyst supporting energy prices is the stock market,” said Liberty Trading Group President James Cordier. “We’re getting a nice rally after last week’s selling.”

The cost of a gallon of regular gasoline dropped 4 cents to $2.40 in metro Orlando during the week ended Sunday, a reflection of falling crude oil prices and a seasonal drop-off in demand.

AAA Auto Club South reported that the Florida average was $2.44 a gallon, down 3 cents, and the national average was $2.50, a 5-cent decline.

Crude futures smashed through the former $68/bbl price-support level to close below $66/bbl, while natural gas continued to rally against all fundamental market indicators.

“The oil-to-gas ratio has now fallen from a record-high of 30 earlier this month to 13 (using the November contracts),” said analysts in the Houston office of Raymond James & Associates Inc. “Oil fell another 4.5% yesterday and is now down over 8% the past 2 days as it settled at its 9-week low.

Aubrey McClendon, chief executive of Chesapeake Energy, told analysts on the August earnings call that he expected natural gas prices would rise to between $6 and $8 per thousand British thermal units (MMBtu) by summer of 2010. As natural gas comprises 92 percent of its total energy production, the company stands in good stead to take advantage of any recovery in prices — especially since it has ample recoverable reserves and the lowest drill bit finding costs in the industry.