Monday, November 29, 2010

Commodity Corner: Crude Oil Begins Week Much Higher

A weaker equities market and a stronger dollar failed to place downward pressure on crude oil Monday. Crude oil for January delivery gained $1.97 to settle at $85.75 a barrel during a trading day influenced by factors ranging from oil products demand to the release of politically sensitive information attributed to U.S. State Department officials. In the latter case, ongoing fallout from the widespread leaks has heightened perceived geopolitical risks.

Exacerbating the geopolitical situation have been escalating tensions between North and South Korea as well as continued speculation about Europe's debt crises. Although the European Union approved a EUR85 billion bailout for Ireland over the weekend, there are fears that other heavily indebted countries such as Spain and Portugal will be next in line for massive financial aid packages. In addition, tightening inventories of gasoline contributed to oil's rally Monday. December gasoline ended the day seven cents higher at $2.28 a gallon

Oil traded within a range from $83.59 to $85.54. Gasoline, meanwhile, peaked at $2.29 and bottomed out at $2.21. Despite a chillier than normal forecast for the Northeast, January natural gas fell 19 cents to settle at $4.21 per thousand cubic feet. The natural gas futures price fluctuated from $4.17 to $4.49.

Posted courtesy of Rigzone.Com


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