Commodity Corner: Oil Edges Lower on Econ Woes

- Commodity Corner: Oil Edges Lower on Econ Woes

Tuesday, September 06, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet oil edged lower Tuesday on lingering concerns about the global economy.

Oil futures traded 43 cents lower at $86.02 a barrel on the New York Mercantile Exchange.

Concerns that the European debt crisis might worsen pushed prices and equities lower Tuesday. Traders worry that the economic plague could spread to neighboring countries.

Prices fell as low as $83.20 a barrel in intraday trading as U.S. stock indexes plummeted for a third consecutive session. They peaked at $86.50. Earlier today, the Dow Jones Industrial Average fell 308 points but rebounded after the Greek government indicated swifter economic reforms.

Traders are waiting to take cues from President Obama and the Federal Reserve's speech later this week.

Brent crude, which is used to price many international oil varieties, gained $2.81 Tuesday to settle at $112.89 a barrel. Brent took its cues from production problems in the North Sea and a continued absence of Libyan oil in the market.

Likewise, natural gas for October delivery added 6.6 cents to settle at $3.94 per thousand cubic feet. Prices fluctuated between $3.85 and $3.95 Tuesday.

The U.S. National Hurricane Center reported that a new weather system west-southwest of the Cape Verde Islands had a 90 percent chance of becoming a cyclone in the next 48 hours.

After trading between $2.77 and $2.84, front-month gasoline lost 1.7 cents to settle down at $2.82 a gallon.

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Commodity Corner: WTI Slips; Brent Edges Upward

- Commodity Corner: WTI Slips; Brent Edges Upward

Friday, August 12, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for September delivery surged above $87 Friday but settled well below that on mixed economic news.

The WTI received a boost for much of the day after the U.S. Department of Commerce's Census Bureau on Friday announced that retail sales increased 0.5 percent last month. Moreover, the bureau revised upward sales figures for both May and June by 0.2 percent. In addition, it reported that sales at gasoline stations rose by 1.6 percent in July.

"Consumer spending reflects the confidence of the American people, and despite recent economic turbulence, we're still seeing widespread growth in spending," Acting Commerce Secretary Rebecca Blank said in a written statement.

The WTI peaked at $87.37 a barrel but settled at $85.38, a 34-cent day-on-day loss, after Thomson Reuters and the University of Michigan reported dramatically lower preliminary consumer confidence figures. The sources' widely observed measure of consumer sentiment plunged 13.8 percent from July to August, hitting its lowest point in 31 years.

The WTI peaked at $87.37 and bottomed out at $84.02.

Brent futures eked out a slight, one-cent gain to end the day at $108.03 a barrel after trading within a range from $107.72 to $108.90.

The consumer confidence news also caused front-month natural gas to end the day lower. The September contract price lost a nickel to settle at $4.06 per thousand cubic feet. Natural gas futures fluctuated from $4.14 to $4.055.

September reformulated gasoline lost less than a penny to settle at $2.82 a gallon. The intraday range for gasoline was $2.81 to $2.86.

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Commodity Corner: WTI Slips, Brent Edges Upward

- Commodity Corner: WTI Slips, Brent Edges Upward

Wednesday, July 06, 2011
Rigzone Staff
by Matthew V. Veazey

An announcement by China's central bank Wednesday contributed to a 24-cent drop in the price of light sweet crude oil on the New York Mercantile Exchange.

The WTI settled at $96.65 a barrel Wednesday after the People's Bank of China announced plans to raise interest rates by one-quarter percent to 6.56 percent effective July 7. The bank's action marks the third such hike this year. Brent, meanwhile, barely ended the day in positive territory. It gained a penny to settle at $113.62 a barrel.

The interest rate hike, coupled with lingering concerns about the debt crises in Greece in Portugal, have stoked fears of softening oil demand among investors. Providing some support for oil were expectations that the U.S. Energy Information Administration and American Petroleum Institute will report lower oil stocks Thursday. A Platts survey of analysts projects that EIA and API inventory data will reveal a 2.5 million-barrel draw.

The August WTI contract peaked at $97.79 and bottomed out at $95.90. Brent fluctuated from $112.17 to $113.82.

Expectations that temperatures will moderate over the next two weeks throughout the Midwest and East Coast&mdash chilled the price of natural gas for August delivery Wednesday. The front-month contract lost 14 cents to settle at $4.22 per thousand cubic feet.

Natural gas traded within a range from $4.26 to $4.36.

August gasoline futures ended the day slightly below $3.00 a gallon after fluctuating from $2.94 to $3.00 during the midweek session.

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Commodity Corner: Oil Edges Up ahead of OPEC Meeting

- Commodity Corner: Oil Edges Up ahead of OPEC Meeting

Tuesday, June 07, 2011
Rigzone Staff
by Saaniya Bangee

Oil futures gained 0.1 percent Tuesday as traders await results from this week's OPEC meeting.

Crude for July delivery gained 8 cents to settle at $99.09 a barrel. Prices dropped as low as $97.74 before rebounding in the last 90 seconds of trading. A weaker dollar helped prevent oil prices from dropping too low.

The 12-member Organization of Petroleum Exporting Countries (OPEC) will be meeting Wednesday for the first time since the political uprising in the Middle East and North Africa. Analysts anticipate that OPEC members will increase oil production in an effort to hinder rising energy prices. By increasing production, oil prices may decrease—making up for the loss of Libyan exports due to the unrest. However, as global demand increases, it may be harder for OPEC to provide additional crude later—ultimately increasing oil prices.

Due to above-average temperatures, front-month natural gas rose for the second straight day settling at a 10-month high. Natural gas gained nearly a penny, ending the trading session at $4.83 per thousand cubic feet. The heat spurs demand for air conditioning, in term boosting the need for power-plant fuel. The intraday range for natural gas was $4.764 to $4.854 Tuesday.

July gasoline settled at $2.99 a gallon, up 4.20 cents from the previous session. Prices for gasoline traded between $2.928 and $3.002 Tuesday.

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Commodity Corner: Oil Edges on Economic Worry

Commodity Corner: Oil Edges on Economic Worry

Thursday, April 28, 2011
Rigzone Staff
by Saaniya Bangee

Front-month crude settled nearly flat on Thursday as concerns grew of slowing U.S. economic growth.

Light, sweet oil retreated earlier highs to end the trading session at $112.86 a barrel, 10 cents higher than the previous day. Crude prices peaked as high as $113.97 a barrel. On Thursday, a weaker dollar provided support for crude prices. Likewise, the Dollar Index, which compares the greenback to a basket of foreign currencies, fell to its lowest level since July 31, 2008.

Although the U.S. economy grew by 1.8 percent in the first quarter, investors remain weary of the economy. At Wednesday's press conference, Fed Chairman Ben Bernanke said he didn't know when the Fed would tighten interest rates. Investors interpreted Wednesday's comments as the economy not being strong enough to handle higher interest rates.

According to the U.S. Labor Department, initial unemployment claims soared to their highest in three months. Analysts fear this could mean fewer cars on the road as it gets closer to the summer driving season.

Meanwhile, natural gas rallied Thursday after government reports signaled an increase in demand. Natural gas for June delivery rose 3.7 percent, settling at $4.571 per thousand cubic feet. Prices fluctuated between $4.396 and $4.599, before ending the day at their highest since Jan. 24.

During the week ended April 22, 31 billion cubic feet of gas was added to stockpiles, as reported by the U.S. Energy Information Administration (EIA).

May gasoline hit fresh 33-month highs settling at $3.43 a gallon. The intraday range for gasoline was $3.39 to $3.48 Thursday.

Commodity Corner: Oil Edges Downward

Commodity Corner: Oil Edges Downward

Tuesday, April 26, 2011

Rigzone Staff

by Matthew V. Veazey

June crude oil fell slightly Tuesday as investors anticipated the outcome of the Federal Open Market Committee (FOMC) meeting, which concludes Wednesday.

Oil lost seven cents to end the day at $112.21 a barrel as the FOMC began its regular two-day meeting to decide on the Federal Reserve's monetary policy. Fed Chairman Ben Bernanke is expected to provide clues about any changes to existing policy Wednesday. The Fed's latest policy course has been to keep interest rates very low in an attempt to stimulate the economy. The policy has had the effect of weakening the U.S. dollar, which in turn has been bullish for oil.

Crude oil peaked at $112.64 and bottomed out at $111.12 Tuesday.

Gasoline for May delivery gained four cents Tuesday after a late-Monday power outage resulted in the temporary shut down of three Texas City, Texas, refineries. The BP, Valero, and Marathon refineries together can process 796,000 barrels of oil per day.

Gasoline futures settled at $3.36 a barrel Tuesday. U.S. gasoline inventories have trended downward over the past two months, prompting investors to pay particularly close attention to the Gulf Coast outages.

May gasoline traded within a range from $3.30 to $3.37 Tuesday.

Front-month natural gas ultimately remained flat at $4.39 per thousand cubic feet Tuesday after fluctuating from $4.34 to $4.41.