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: Late Selloff Pushes WTI Downward

- Commodity Corner: Late Selloff Pushes WTI Downward

Wednesday, August 24, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil on the New York Mercantile Exchange benefited from bullish U.S. inventory data for much of the day Wednesday, but a selloff late in the midweek session resulted in 28-cent day-on-day loss.

The WTI ended the day at $85.16 a barrel after receiving a boost for much of the day from the latest oil stocks figures from the U.S. Energy Information Administration (EIA). EIA reported Wednesday that U.S. commercial crude oil inventories fell by 2.2 million barrels last week to 351.8 million barrels. Analysts surveyed by Platts had expected a 2 million-barrel build, rather than a draw, for the period.

Light sweet crude peaked at $86.59 and bottomed out at $84.55 Wednesday.

The Brent contract price did manage to settle higher Wednesday, gaining 38 cents to finish at $110.15 a barrel. Brent traded within a range from $109.20 to $110.96.

After Tuesday's East Coast earthquake rattled nerves and contributed to a spike in natural gas futures, Wednesday's relative geologic calm in the U.S. helped the front-month price return to negative territory. The September contract lost seven cents to end the day at $3.92 per thousand cubic feet.

Natural gas fluctuated from $3.91 to $4.03 Wednesday.

Reformulated gasoline for September delivery remained flat at $2.88 a gallon Wednesday after trading from $2.85 to $2.91.

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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, Brent Rebound

- Commodity Corner: WTI, Brent Rebound

Wednesday, August 10, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil on the New York Mercantile Exchange rebounded Wednesday after the U.S. Department of Energy reported that inventories fell last week, catching investors off-guard.

The September WTI contract price gained $3.59 to settle at $82.89 a barrel. The Energy Information Administration (EIA) announced that commercial crude stocks declined by 5.2 million barrels last week to 349.8 million barrels. The 1.5-percent week-on-week draw starkly contrasted to the prediction of a Platts survey of analysts: a 1.8 million-barrel build for the period.

Brent futures also surged Wednesday, settling $4.11 higher at $106.68 a barrel. The WTI traded within a range from $79.53 to $82.90. The contract price for Brent fluctuated from $103.47 to $106.55.

EIA also reported Wednesday that reformulated gasoline inventories declined by a larger-than-expected volume last week: 1.6 million barrels. The 213.6 million barrel EIA figure for the week ending August 5, 2011, was 400,000 barrels below what a Platts survey of analysts had projected.

Front-month gasoline gained 11 cents to end the day at $2.78 a gallon. The September contract price peaked at $2.79 and bottomed out at $2.68.

Natural gas for September delivery edged upward by less than a penny to settle at $4.00 per thousand cubic feet. The contract price fluctuated from $3.98 to $4.08.

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Commodity Corner: WTI, Brent Futures Plummet

- Commodity Corner: WTI, Brent Futures Plummet

Monday, August 08, 2011
Rigzone Staff
by Matthew V. Veazey

On the first trading day after Standard & Poor's downgraded the United States' long-term credit rating from AAA to AA+, the WTI settled at its lowest point in nearly nine months.

Light sweet crude oil lost $5.57 to end the day at $81.31 a barrel—just six cents higher than the Nov. 23, 2010, settlement price. Concerns that the U.S. is slipping into a double-dip recession have dampened expectations about oil demand. Equity markets also sustained significant losses Monday. The Dow Jones Industrial Average fell 5.55 percent while the S&P 500 declined nearly 6.7 percent.

The Brent futures price also plunged Monday but to a somewhat more modest degree than the WTI. It ended the day at $103.47, marking a $5.63 decline from Friday.

The WTI peaked at $85.73 and bottomed out at $80.17 while the Brent traded within a range from $102.88 to $106.92.

Also reflecting fears about slumping demand was the price of gasoline for September delivery, which lost 4.1 percent to end the day at $2.69 a gallon. Front-month gasoline traded within a range from $2.80 to $2.67 Monday.

September natural gas remained relatively steady Monday, losing less than one cent to settle at $3.935 per thousand cubic feet. Natural gas peaked at $3.97 and bottomed out at $3.855.

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Commodity Corner: WTI Nears $91; Brent Approaches $113

- Commodity Corner: WTI Nears $91; Brent Approaches $113

Wednesday, August 03, 2011
Rigzone Staff
by Matthew V. Veazey

The September WTI contract price tumbled two percent Wednesday after the U.S. Energy Information Administration reported that commercial crude oil inventories increased last week.

Light sweet crude oil fell to $91.22 a barrel before ending the day at $91.93. The intraday high was $93.75. The EIA on Wednesday reported that oil stocks increased by one million barrels last week to 355.0 million barrels. The July 29, 2011, figure was three million barrels lower than the corresponding figure last year. Analysts surveyed by Platts had anticipated a larger build in EIA's latest report, predicting a two million-barrel week-on-week increase in inventories.

Brent futures fell more dramatically Wednesday, losing $3.23 to settle at $113.23 a barrel. The contract peaked at $115.98 and bottomed out at $113.09 during the midweek session.

Thanks to a moderating temperature outlook from the Midwest to the Northeast for the next two weeks, cooling demand in these power-hungry regions is expected to remain at normal levels. Not surprisingly, natural gas for September delivery lost 6.5 cents Wednesday. Natural gas settled at $4.09 per thousand cubic feet after trading within a range from $4.07 to $4.18.

Front-month gasoline plunged 3.6 percent Wednesday to settle at $2.93 a gallon. The September contract fluctuated from $2.92 to $3.02.

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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: WTI Loses 2.5% on Jobs Data

- Commodity Corner: WTI Loses 2.5% on Jobs Data

Friday, July 08, 2011
Rigzone Staff
by Matthew V. Veazey

Following the release of anemic U.S. employment growth figures Friday, the price of light sweet crude oil on the New York Mercantile Exchange fell 2.5 percent to end the day at $96.20 a barrel.

The U.S. Department of Labor reported a slight increase in non-farm payrolls for June: a net gain of only 18,000 non-farm payrolls. The figure is based on the addition of 57,000 private-sector jobs offset by a 39,000-job reduction by local, state, and federal governments during the period.

The net gain for June was far lower than what economists had expected. For instance, Bloomberg reported that its survey of economists anticipated 105,000 additional jobs under the most bearish scenario. Dampening the outlook for crude oil demand further, the Labor Department also reported that the national unemployment rate for June rose to 9.2 percent—a 0.1 percentage point increase from the previous month.

The WTI traded within a range from $95.60 to $99.18 Friday. The Brent futures contract on the IntercontinentalExchange lost 26 cents to settle at $118.33. The Brent price fluctuated from $117.18 to $119.79.

Natural gas futures ended the day higher, settling at $4.205 per thousand cubic feet. The 6.5-cent increase in the August contract price stems from weather forecast models anticipating above-normal temperatures from the Southwest to the Northeast well into next week.

Front-month natural gas peaked at $4.21 and bottomed out at $4.12.

Gasoline for August delivery settled at $3.09 a gallon. The contract price fluctuated from $3.07 to $3.13.

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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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