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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Commodity Corner: Oil Plummets on Stronger Dollar

- Commodity Corner: Oil Plummets on Stronger Dollar

Wednesday, June 15, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery plunged Wednesday as fears of an escalating debt crisis in Greece contributed to a stronger dollar.

Oil lost $4.56 to settle at $94.81 after the dollar index, a gauge of the greenback's value against other major currencies, increased by 1.5 percent Wednesday. The euro lost 2.1 percent against the dollar, weighed down by Greek government officials' scrambling to gain support for austerity measures. The government must agree to such measures to address the country's debt crisis in order to qualify for a bailout from the European Union and International Monetary Fund.

Providing a softer landing for oil was a U.S. Energy Information Administration report showing a larger-than-expected decline in crude oil stocks last week. According to the EIA, total oil inventories decreased by 3.4 million barrels to 365.6 million barrels as of June 10. Analysts surveyed by Platts, meanwhile, had projected a 1.9 million-barrel draw.

Front-month crude traded within a range from $94.01 to $99.95 Wednesday.

July natural gas remained flat during midweek trading, ending the day at $4.58 per thousand cubic feet. Milder-than-normal temperatures throughout the Upper Midwest and Northeast are curbing demand for natural gas to generate electricity for cooling in these regions.

Natural gas peaked at $4.605 and bottomed out at $4.52 Wednesday.

The gasoline futures price lost 15 cents to settle at $2.92 a gallon. During Wednesday's session, July gasoline fluctuated from $2.91 to $3.07.

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