Friday, August 05, 2011
Rigzone Staff
by Matthew V. Veazey
After settling at its lowest point in six months Thursday, light sweet crude oil for September delivery managed to eke out a small gain for the day.
The WTI settled at $86.88 a barrel, representing a 25-cent day-on-day increase, after a volatile trading session. The benchmark plunged to an intraday low of $82.87 on escalating debt crisis fears within the eurozone.
Italy is the latest EU country to risk defaulting on its massive public debt. Making debt service less manageable is Italy's stagnant economic growth rate. A possible Italian bailout, along with other debt restructuring initiatives elsewhere in the eurozone, has caused the region's currency to lose value; in this situation, dollar-denominated crude oil becomes a less attractive buy for investors holding the euro.
Investor sentiment brightened later Friday, however, amid reports that Italy's government plans to take steps to jump-start economic growth. The economic liberalization program reportedly includes measures such as amending the country's constitution to require a balanced budget, loosening certain employment rules, and accelerating the pace of entitlement reform.
Also giving oil a boost Friday was a U.S. Labor Department report stating that non-farm payrolls increased by 117,000 last month, beating economists' expectations. Also, the agency announced that the official unemployment rate edged downward in July by 0.1 percentage point to 9.1 percent.
The WTI peaked at $86.88 Friday. The September Brent contract price gained $2.12 to end the day at $109.37 a barrel. It fluctuated from $105.69 to $109.90.
Natural gas for September delivery ended the day flat at $3.94 per thousand cubic feet. It traded within a range from $3.90 to $3.98.
September gasoline climbed nearly seven cents to end the day at $2.805 a gallon. The front-month contract peaked at $2.82 and bottomed out at $2.68.
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