Thursday, August 04, 2011
Rigzone Staff
by Saaniya Bangee
Crude oil futures plunged nearly 6 percent Thursday to its lowest settlement since February. Prices pushed lower $5.30, marking the largest one-day drop since May 5, as equity markets sold off.
Light, sweet crude settled at $86.63 a barrel on the New York Mercantile Exchange (NYMEX), down for the fifth consecutive session. Its counterpart settled at $107.25 a barrel amid Europe's sovereign debt crisis. Brent crude traded within a range of $107.05 and $113.60 Thursday.
Largely steered by growing concern that the U.S. economy is experiencing a double-dip recession, equity markets sold-off sharply mid-day Thursday pushing prices further. In addition, the greenback gained against the euro Thursday as the Dollar Index rose by almost 1.5 percent. As the greenback rises, the dollar-denominated commodities becomes expensive for foreign buyers.
Likewise, natural gas futures also tumbled Thursday falling below the $4-mark for the first time since March. Front-month natural gas lost nearly 15 cents to settle at $3.94 per thousand cubic feet. The Energy Information Administration said U.S. natural gas inventory increased by 44 billion cubic feet for the week ended July 29.
Meanwhile, moderate temperature forecasts didn't give the market much support either. Also, the National Hurricane Center reported that Tropical Storm Emily isn't headed toward the Gulf of Mexico.
The intraday range for natural gas was $3.915 to $4.119 per thousand cubic feet.
Gasoline for September delivery dropped 19.41 cents, or 6.6 percent, to end Thursday's trading session at $2.74 a gallon, having traded as low as $2.728 after an earlier intraday peak of $2.94.
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