Commodity Corner: Oil Down on Bernanke Comments

- Commodity Corner: Oil Down on Bernanke Comments

Thursday, July 14, 2011
Rigzone Staff
by Saaniya Bangee

Oil futures plummeted Thursday after Federal Reserve Chairman Ben Bernanke stifled expectations of the Federal Reserve providing additional monetary aid. During the Fed's semiannual policy report, Bernanke explained that as of now, the central bank would not be releasing further funds.

The news sent the dollar soaring. A stronger greenback pressures oil prices making the dollar-denominated commodities more expensive for foreign buyers.

Easing the drop in prices, the U.S. Labor Department reported that the number of claims for unemployment benefits decreased by 22,000—the lowest in three months. In spite the decrease, application levels remain above 400,000, representing a weak job market.

In early trading, crude futures rose as high as $98.88 a barrel, before settling at $95.69 on the New York Mercantile Exchange (NYMEX).

Front-month Brent ended the August contract at $118.32 a barrel on the ICE Futures exchange. The intraday range for Brent crude was $117.73 to $119.40 a barrel.

Meanwhile, natural gas for August delivery lost 2.9 cents to end Thursday's session at $4.36 per thousand cubic feet. According to the U.S. Energy Information Administration, natural gas inventory grew by 84 billion cubic feet. Prices peaked at $4.41 and bottomed out at $4.25 Thursday.

Reformulated August gasoline blendstock also traded lower, settling at $3.12 a gallon. Gasoline futures traded between $3.094 and $3.159 Thursday.

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Commodity Corner: Oil Gets Boost from EIA, Bernanke

- Commodity Corner: Oil Gets Boost from EIA, Bernanke

Wednesday, July 13, 2011
Rigzone Staff
y Matthew V. Veazey

Oil futures received a boost Wednesday from the latest inventory data from the U.S. Energy Information Administration as well as testimony by Federal Reserve Chairman Ben Bernanke. The WTI benchmark on the New York Mercantile Exchange gained 62 cents to settle at $98.05 a barrel. Brent futures, meanwhile, rose $1.03 to end the day at $118.78 a barrel.

The EIA reported that U.S. commercial crude oil inventories declined sharply last week. According to the agency, oil stocks fell by 0.9 percent to 355.5 million barrels. The 3.1 million barrel week-on-week decline exceeded analysts' expectations. A panel of analysts surveyed by Platts, for instance, predicted a relatively modest 2.1 million-barrel draw.

Testifying before a U.S. House panel Wednesday, Bernanke hinted that the central bank may initiate a third attempt to stimulate the economy by printing more money to buy Treasury bonds. This "quantitative easing" monetary policy approach is designed to improve liquidity in the economy by enticing banks to make more loans to businesses and consumers. A third round of quantitative easing, or "QE3," would be bullish for oil because the Fed would weaken the value of the U.S. dollar by making money more widely available to banks. For investors holding currencies other than the greenback, dollar-denominated crude oil would become a better value.

The WTI peaked at $99.21 and bottomed out at $96.53 while Brent futures fluctuated from $117.01 to $119.50.

Front-month natural gas gained seven cents to settle at $4.40 per thousand cubic feet. Sizzling temperatures extending from the Midwest to the East Coast, with more to come beginning this weekend after a brief respite, have boosted cooling demand.

The intraday range for natural gas during midweek trading was $4.31 to $4.42.

Gasoline futures rose by a nickel to end the day at $3.15 a gallon. The commodity traded within a range from $3.08 to $3.175.

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Commodity Corner: Crude Up on Bernanke Comments

Commodity Corner: Crude Up on Bernanke Comments

Wednesday, April 27, 2011
Rigzone Staff
by Saaniya Bangee

Crude oil climbed higher Wednesday after the U.S. Federal Reserve indicated there would be no change in its monetary policy.

Light, sweet crude settled at $112.76 a barrel, up 55 cents. After a two-day meeting, Federal Reserve chairman Ben Bernanke said Wednesday that the spike in inflation will be temporary, due to higher oil and gas prices, and that the economy will continue to recover at a moderate pace.

The Fed also said it will keep interest rates near zero. Lower interest rates have helped keep the dollar weak contributing to higher oil prices. Oil, which is priced in dollars, is more attractive to foreign buyers when the dollar is weak.

Crude futures for June delivery fluctuated between $110.71 and $113.40 Wednesday.

Meanwhile, crude futures were also pressured by strong gasoline prices. Front-month gasoline gained 6.22 cents, settling at $3.419 a gallon. Gasoline futures traded between $3.35 and $3.44 a gallon on Wednesday. RBOB gasoline futures ended the day's trading session at their highest in 33 months. The Energy Information Administration (EIA) reported that gasoline stockpiles fell last week for the 10th week in a row, the lowest level since Sept. 2009.

After trading between $4.37 and $4.43, May natural gas lost a penny to settle at $4.377 a gallon Wednesday.

Fed Lowers 2011 GDP Growth Estimate, Raises Core Inflation Expectation

Fed Lowers 2011 GDP Growth Estimate, Raises Core Inflation Expectation



Apr 27, 2011

The US Federal Reserve on Wednesday lowered its expected rate of growth for the US economy in 2011, citing a slower pace than anticipated for the start of the year. In an unprecedented press conference after a meeting of the Fed's Board of Governors, Chairman Ben Bernanke said that the employment picture appears to be better than expected. January's unemployment rate forecast of 8.8- 9% was lowered to 8.4-8.7% for the end of the year.