Is Goldman Sachs Moving Energy Markets Again?

The Dow (NYSE:DIA) has given up early gains as it has now fallen back below 12,000.  Even though the U.S. Dollar (NYSE:UUP) bumped hits head near 75 again, commodities such as oil (NYSE:USO), gold (NYSE:GLD) and silver (NYSE:SLV) are all down on the day.

Despite U.S. light, sweet crude falling to a low of $98.71 on the day, Brent crude futures climbed as high as $120.  The divergence between sweet crude and brent reached an all-time record of $21.60 today.  Oil companies such as Exxon Mobil (NYSE:XOM) traded .48% lower, and Chevron Corp (NYSE:CVX) declined about .62%.

Oil wasn’t the only energy play trading lower on Monday.  Natural gas (NYSE:UNG), which saw a mini-flash crash last week, was trading nearly 3% lower early Monday.  Goldman Sachs (NYSE:GS) released a negative statement regarding natural gas. Goldman explains, “NYMEX natural gas prices have rallied 12% in the past three weeks, largely driven by strong cooling-related demand for natural gas on the back of significantly warmer-than-average temperatures, and exacerbated by the still high nuclear outages. However, these factors are transient in nature,and their support to generation demand for natural gas will likely diminish the coming weeks as the weather normalizes and nuclear power plants come out of maintenance.”  Goldman also goes on to recommend shorting October 2011 NYMEX Natural Gas contract at an initial price of $4.84/mmBtu.  Natural gas giant Chesapeake Energy (NYSE:CHK) took a hit on the news, falling nearly 3%.  Devon Energy (NYSE:DVN) also fell 2.4% mid-day.

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Disclosure: No positions.