Monday, May 23, 2011
Rigzone Staff
by Matthew V. Veazey
The July contract price for a barrel of crude oil fell to $97.70 a barrel Monday.
Monday's selloff occurred as the dollar strengthened amid fears of a spreading debt crisis in the European Union. Stoking concerns was Standard and Poor's decision to revise Italy's credit outlook from stable to negative. The Dollar Index, which gauges the value of the U.S. Dollar against a basket of other major world currencies, rose 0.93 percent Monday. Priced in dollars, oil becomes a less attractive value for investors holding other currencies.
Also contributing to the lower oil price was a report by HSBC that manufacturing growth in China hit its lowest point in nine months in April. The bank, in releasing its latest Purchasing Managers Index (PMI) report, observed that new order growth in China is below the long-run trend.
July crude oil peaked at $100.04 and bottomed out at $96.37 during Monday's session.
Weather forecasters expect Americans in the southern and eastern regions of the U.S. to experience hotter-than-normal temperatures through next week. As a result, demand for air conditioning—and the natural gas used to generate electricity—is expected to strengthen during the period.
Front-month natural gas gained 12 cents Monday to settle at $4.35 per thousand cubic feet. June natural gas traded within a range from $4.22 to $4.38.
The June gasoline contract price remained flat at $2.94 a gallon Monday. It fluctuated from $2.87 to $2.955.
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