Friday, October 8, 2010

Commodity Corner: Crude Oil, Gasoline End the Week Higher

French labor troubles helped November crude oil to settle higher Friday. Crude oil for November delivery settled at $82.66 a barrel, a 99 cent gain from Thursday, as traders considered the increasing fallout from an ongoing strike at the Fos-Lavera oil and gas terminal near Marseille. The third-largest oil port in the world, Fos-Lavera is the key entry point for crude oil destined for half of France's refineries as well as other European refineries. For nearly two weeks, striking workers have prevented oil tankers from entering the port. With refinery utilization already low in a number of European refineries, a prolonged strike at Fos-Lavera could lead to refinery shutdowns.

The Fos-Lavera matter, coupled with a strong euro compared to the dollar, proved to have a greater influence on Friday's oil futures price than unimpressive September jobless figures from the U.S. Labor Department. The federal agency reported Friday that nonfarm payroll employment fell by 95,000 jobs last month and that the unemployment rate remained at 9.6 percent during that period. Oil traded from $80.30 to $83.13, and it ended the week 1.5 percent higher.

Natural gas futures, which plunged by more than six percent Thursday, regained some momentum Friday. November natural gas settled three cents higher to end the day at $3.65 per thousand cubic feet. The front month gas price, which has declined with recent mild weather forecasts, fluctuated between $3.58 and 3.68 Friday. Compared to Monday's $3.73 settlement price, gas is down 2.1 percent for the week. The price of a gallon of gasoline rose by three cents Friday, settling at $2.15. The intraday range for gasoline was $2.09 to $2.16, and the commodity ended the week up 2.9 percent.

Courtesy of Rigzone.Com

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