- Commodity Corner: Oil Rises on Forecasts, Dollar
Tuesday, May 24, 2011
by Saaniya Bangee
Crude futures gained nearly 2 percent on a weaker dollar and bullish forecasts Tuesday.
Light, sweet crude settled at $99.59 a barrel, after reaching a high of $100.09 earlier in the trading session. The almost two dollar gain came as the euro recovered a two-month low against the dollar. The greenback slipped against the euro on better-than-expected German business sentiment. The ICE Dollar Index, which gauges the dollar against a basket of foreign currencies, decreased 0.4 percent Tuesday.
On Tuesday, Goldman Sachs increased its year-end target for Brent crude to $120 a barrel, saying it anticipates demand growth will sap global supply and overextend spare oil output capacity. It raised its 2012 forecasts to $140 per barrel from $120. Likewise, rival Morgan Stanley lifted its 2011 forecast to $120 a barrel, previously $100. Morgan Stanley forecasts 2012 Brent to be $130 a barrel from $105.
Meanwhile, natural gas for June delivery lost a penny to settle at $4.345 per thousand cubic feet Tuesday. The drop came on speculation that demand from power plants won't be able to exceed increasing inventories. Prices fluctuated between $4.27 and $4.40 per thousand cubic feet.
After trading between $2.92 and $3.03, June gasoline prices settled at $2.99 per gallon, up 5 cents from Monday.
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