Commodity Corner: WTI, Brent Settle Higher

- Commodity Corner: WTI, Brent Settle Higher

Tuesday, August 30, 2011
Rigzone Staff
by Matthew V. Veazey

The WTI and Brent crude oil benchmarks settled higher Tuesday after the Federal Reserve left investors contemplating whether the central bank will try yet again to shore up the sagging U.S. economy.

Light sweet crude oil gained $1.63 to settle at $88.90 a barrel while the Brent picked up $2.14 to end the day at $114.02 a barrel after the Fed released the minutes of the August 9, 2011, joint meeting of the Federal Open Market Committee and the Federal Reserve Board of Governors. The minutes reveal support among some members for more monetary action to spur economic growth.

One possible Fed move, which the central bank has initiated twice since the 2008-2009 financial crisis, is quantitative easing. The approach calls for the Fed's purchase of U.S. Treasury bonds so that banks would have more money available to lend to businesses and consumers.

Both "QE1" and "QE2" yielded a weaker U.S. dollar, which in turn was bullish for crude oil. When the dollar weakens, oil—priced in greenbacks—becomes a better value for investors holding other currencies. The minutes show that the Fed voted to extend its September meeting to two days rather than one, giving it more time to consider the merits of "QE3" and any other options remaining at its disposal.

Also boosting oil was the development of Tropical Storm Katia in the eastern Atlantic Ocean. Located approximately 750 miles west of the Cape Verde Islands late Tuesday, Katia was moving toward the west-northwest at 20 miles per hour. The National Hurricane Center expects the storm to be a major hurricane by Saturday afternoon, when it should be centered to the east of the Lesser Antilles.

During Tuesday's floor trading, the WTI fluctuated from $86.46 to $89.21. The Brent peaked $114.20 and bottomed out at $111.22.

Natural gas for October delivery settled at $3.91 per thousand cubic feet, up a nickel from the final price for the now-expired September contract. October natural gas traded within a range from $3.78 to $3.92.

September gasoline gained nine cents to end the day just under $3.00 a gallon. The futures price fluctuated from $2.897 to $3.00.

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Commodity Corner: WTI, Brent Settle Lower

- Commodity Corner: WTI, Brent Settle Lower

Monday, July 11, 2011
Rigzone Staff
by Matthew V. Veazey

Oil futures ended the first day of the week lower as the U.S. Dollar gained strength against other major currencies. A stronger greenback makes oil a less attractive buy for investors holding other currencies.

The price of light sweet crude oil on the New York Mercantile Exchange settled at $95.15 a barrel, marking a $1.15 slide from the previous trading day. The Brent futures price lost $1.09 to end the day at $117.24 a barrel. The Dollar Index, which gauges the price of the greenback against other major currencies, increased 1.1 percent Monday.

Speculation that debt woes in Europe will escalate provided support for the dollar Monday as the focus shifts to Italy, where some believe that a crisis akin to what Greece recently experienced could erupt. Italian government bond yields rose late last week, signaling reduced confidence in Italy's ability to avert default. The WTI futures price peaked at $96.75 and bottomed out at $94.14 Monday while the intraday range for Brent fluctuated from $115.27 to $118.29.

Buoyed by predictions of warmer-than-normal temperatures throughout the Midwest and East Coast during the next two weeks, natural gas futures gained 8.5 cents Monday. The August contract price settled at $4.29 per thousand cubic feet after trading within a range from $4.18 to $4.34.

Gasoline for August delivery lost two cents to end the day at $3.07 per gallon. It fluctuated from $3.03 to $3.10.

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Commodity Corner: Oil, Natural Gas Settle Higher

- Commodity Corner: Oil, Natural Gas Settle Higher

Thursday, June 30, 2011
Rigzone Staff
by Matthew V. Veazey

The price of light sweet crude oil for August delivery gained 65 cents Thursday to settle at $95.42 a barrel.

The WTI received a boost from a weaker dollar as well as a slight improvement in new jobless claims. The Dollar Index declined 0.4 percent, signifying that dollar-denominated crude oil became a better value for investors holding currencies other than the greenback. In addition, the U.S. Department of Labor reported that first-time claims for unemployment insurance declined by 1,000 to 428,000 last week.

The August WTI contract price fluctuated from $93.88 to $95.82. Brent futures settled at $112.40 a barrel. The Brent contract traded within a range from $108.10 to $112.67.

August natural gas gained 5.5 cents to settle at $4.37 per thousand cubic feet. The U.S. Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 78 billion cubic feet last week. The implied build was lower than what analysts had expected. A Platts survey of analysts projected an increase of 80 to 84 Bcf.

Natural gas futures traded within a range from $4.21 to $4.42 Thursday.

July gasoline gained two cents to end the day at $3.03 a gallon—the intraday high. Gasoline bottomed out at $2.98 Thursday.

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Commodity Corner: Oil, Natural Gas Settle Lower

- Commodity Corner: Oil, Natural Gas Settle Lower

Monday, June 13, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery settled at $97.30 a barrel Monday.

The $1.99 day-on-day decline reflected investors' pessimism about the outlook for U.S. oil demand and the direction of the national economy. Oil traded within a range from $96.13 to $99.32.

Also falling Monday was the natural gas futures price, which lost 11 cents to settle at $4.65 per thousand cubic feet. The July contract price has enjoyed an uptick lately as temperatures in key U.S. cooling markets have exceeded normal ranges. As conditions in the Northeast and other areas moderate, however, the demand for cooling should fall. Moreover, nuclear power plants are concluding maintenance-related downtime and returning to normal operating levels. Consequently, demand for natural gas to generate electricity should decrease.

July natural gas peaked at $4.81 and bottomed out at $4.61 Monday.

Front-month gasoline lost two cents to end the day just under $3.00 a gallon. The July contract price fluctuated from $2.955 to $3.05.

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