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Oil and Gas Energy News Update

Thursday, August 18, 2011

Commodity Corner: Oil Plummets 5.9 Percent

- Commodity Corner: Oil Plummets 5.9 Percent

Thursday, August 18, 2011
Rigzone Staff
by Saaniya Bangee

A broad sell-off in stocks triggered recession fears Thursday, reversing crude's upward move yesterday.

Light, sweet crude futures dove nearly 6 percent Thursday to end the day at $82.38 a barrel. Futures settled as low as $81.15 a barrel. Lingering concerns over the global economy have pressured oil prices to decline 14 percent this month.

A Philadelphia Federal Reserve survey showed that factory activity in the Mid-Atlantic region weakened to its lowest level in more than two years. In addition, the U.S. Labor Department said initial unemployment benefits rose by 9,000 to 408,000 for the week ending Aug. 13.

Existing homes sales declined by 3.5 percent in July, marking an 8-month low, the National Association of Realtors reported.

Brent crude also settled lower at $107.05 a barrel on the ICE futures exchange, down $3.55 a barrel.

Natural gas for September delivery settled lower 4.1 cents at $3.89 per thousand cubic feet on an increase in U.S. stockpiles. The Energy Information Administration said inventories for natural gas grew by 50 billion cubic feet for the week ended Aug. 12. According to the reports, stockpiles were 2.5 percent below the 5-year average and 5.8 percent below 2010 levels.

A tropical wave identified approximately 200 miles east-northeast of Nicaragua has an 80 percent chance of becoming a cyclone over the next 48 hours, the U.S. National Hurricane Center reported.

The intraday range for natural gas was $3.843 to $3.92 Thursday.

September gasoline lost 3 percent Thursday settling at $2.78 a gallon. Gasoline prices fluctuated between $2.76 and $2.879 a gallon.

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