Commodity Corner: Crude Rallies Along with Equities

- Commodity Corner: Crude Rallies Along with Equities

Monday, August 15, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for September delivery gained $2.50 Monday to settle at $87.88 a barrel.

Rallies in equities markets worldwide, coupled with a weaker dollar, propelled oil futures forward. Major merger announcements Monday by heavyweights such as Google and Transocean helped the Dow Jones Industrial Average and S&P 500 to finish the day 1.9 percent and 2.18 percent higher, respectively.

The U.S. Dollar, meanwhile, weakened against other major currencies after a monthly Federal Reserve Bank of New York report showed worsening business conditions in the Empire State. A weaker greenback makes dollar-denominated crude oil a better buy for investors holding other currencies. The New York Fed's survey revealed falling orders, decreasing prices, plunging capital expenditures, and a future general business conditions index hitting its lowest point since February 2009.

The WTI peaked at $88.05 and bottomed out at $84.40. Brent futures settled at $109.91 a barrel, a $1.88 day-on-day gain and four cents shy of Monday's intraday high. The September Brent contract fell to $108.20 earlier in the session.

Thanks in part to milder temperatures in much of the U.S., August natural gas futures lost four cents to settle at $4.02 per thousand cubic feet. The front-month contract price fluctuated from $3.95 to $4.06.

The price of a gallon of reformulated gasoline gained a nickel to end the day at $2.87. August gasoline traded within a range from $2.81 to $2.88.

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Commodity Corner: Oil Rallies on Market Rebound

- Commodity Corner: Oil Rallies on Market Rebound

Thursday, August 11, 2011
Rigzone Staff
by Saaniya Bangee

Soaring to its highest all week, NYMEX crude rallied Thursday as U.S. equities opened higher and the Labor Department reported positive job data.

Front-month crude oil futures gained 3.4 percent, or $2.83, to settle at $85.72 a barrel. Likewise, Brent crude also advanced, settling up $1.34 at $108.02 a barrel.

Following the worst plunge in almost a year, U.S. stocks opened higher Thursday. The S&P 500 advanced 4.6 percent, while the Dow Jones Industrial Average increased by 3.9 percent in New York.

According to the U.S. Labor Department, the number of initial unemployment claims fell by 7,000 to a seasonally adjusted 395,000, marking a four-month low.

The intraday range for WTI was $81.03 to $85.97 and $104.51 to $108.19 for its European counterpart.

Natural gas for September delivery traded up 10 cents to $4.11 per thousand cubic feet. The September contract price for natural gas fluctuated between $3.94 and $4.14 Thursday.

The Energy Information Administration said stockpiles grew by 25 billion cubic feet in the week ended Aug. 5.

Two of three low-pressure systems in the Atlantic have a 40 percent chance of forming into a tropical cyclone, reported the U.S. National Hurricane Center.

Reformulated gasoline blendstock held on to yesterday's gains settling up 4.48 cents at $2.83 a gallon. Prices peaked at $2.839 and bottomed out at $2.745 Thursday.

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Commodity Corner: Oil Rallies on Economic Data

- Commodity Corner: Oil Rallies on Economic Data

Tuesday, June 14, 2011
Rigzone Staff
by Saaniya Bangee

Oil prices surged Tuesday on brighter economic news and the dollar's decline. Light, sweet crude futures gained $2.07 to settle at $99.37 a barrel on the New York Mercantile Exchange (NYMEX).

According to U.S. government reports, retail sales dropped for the first time in 11 months. A decline in car sales, which were affected by the earthquake in Japan, caused retail sales to fall by 0.2 percent. However, ruling out auto sales, purchases rose by 0.3 percent. Additionally, the U.S. Labor Department reported a decrease in food costs.

For the first time in two weeks, the Dow Jones Industrial Average, Nasdaq and the S&P 500 were up by more than 1 percent.

On Tuesday, the greenback declined against the euro and other foreign currencies after Chinese economic reports eased concerns about global demand. As the dollar drops, the dollar-denominated commodity becomes cheaper amongst foreign buyers.

The intraday range for oil was $96.51 to $99.44 a barrel.

Prices for front-month gasoline surged 2.3 percent, settling at $3.065 a gallon Tuesday. The increase came on news of BP’s 457,000 bpd refinery being shut down Monday night and an upset at Shell's 327,000 bpd refinery. Both refineries are located in Texas. The 6.78 cent-gain came after fluctuating between $2.997 and $3.07 Tuesday.

Meanwhile, natural gas for July delivery fell 6.5 cents to settle at $4.581 per thousand cubic feet. Natural gas prices traded between $4.56 and $4.65 Tuesday.

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Commodity Corner: Oil Rallies As Dollar Slides

Commodity Corner: Oil Rallies As Dollar Slides

Thursday, April 21, 2011
Rigzone Staff
by Matthew Veazey

The U.S. Dollar continued to lose ground against other currencies and oil continued to rally Thursday.

Crude oil for June delivery settled at $112.29 a barrel, gaining 84 cents from the previous day. Oil has rallied this week as the greenback has weakened against other major currencies. A key contributor to the dollar's recent fall was Standard & Poor's announcement Monday that it was revising its long-term U.S. debt outlook from stable to negative.

Since Monday, the euro has strengthened more than two percent against the dollar. In such a case where the dollar weakens against other currencies, oil and other commodities tend to rally because they become a better value for investors holding these other currencies.

Crude oil traded within a range from $111.00 to $112.48 Thursday.

Natural gas also ended the day higher after the U.S. Department of Energy announced a smaller-than-expected increase in the country's natural gas inventories. The federal agency's Energy Information Administration reported that natural gas stocks rose by 47 billion cubic feet last week; analysts had expected a higher increase. A Platts survey of analysts, for instance, had anticipated a build of 49 to 53 Bcf week-on-week.

Given the EIA data, May natural gas increased by a dime to settle at $4.41 per thousand cubic feet Thursday. Gas peaked at $4.42 and bottomed out at $4.27.

May gasoline gained three cents to end the day at $3.31 a gallon. It fluctuated from $3.26 to $3.32 during Thursday's session.

Commodity Corner: Oil Rallies on Fed Report

Commodity Corner: Oil Rallies on Fed Report

Friday, April 15, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil futures gained $1.55 Friday on news that U.S. industrial production grew last month.

May crude oil settled at $109.66 after the Federal Reserve reported that industrial production increased 0.8 percent in March, compared to just 0.1 percent in both January and February. Year-on-year, total industrial production for March reportedly increased by 5.9 percent.

The Fed also noted that manufacturing output increased by 0.7 percent last month while factory production rose to an annual rate of 9.1 percent during the first quarter. In addition, the central bank noted that total industry capacity utilization climbed by 0.5 percentage point to 77.4 percent.

Oil futures traded within a range from $107.21 to $110.10 Friday. Compared to last Friday's settlement price, oil is down 2.8 percent for the week.

Front-month natural gas lost a penny Friday to settle at $4.20 per thousand cubic feet. The dip followed predictions of above-normal temperatures throughout the eastern U.S. during the next two weeks.

May natural gas peaked at $4.24 and bottomed out at $4.17 during Friday's session. Week-on-week, natural gas is up nearly four percent.

Gasoline for May delivery gained six cents to end the day at $3.29 a gallon. It fluctuated between $3.23 and $3.30 during end-of-week trading. For the week, gasoline is up 0.9 percent.