Tuesday, November 9, 2010

Commodity Corner: Crude Oil Ends 6 Day Rally

Tuesday's crude futures ended a six day rally Tuesday, as the dollar strengthened against the euro. Crude reached a two year high of $87.63 earlier in the day, before ending Tuesday's trading session at $86.72 a barrel, a 34 cent drop. Oil bottomed out at $85.48. The euro strengthened and the dollar weakened earlier Tuesday following the sale of Greek Treasury bills. The greenback later rebounded amid concerns of European governments struggling to pay their debt. A stronger dollar causes dollar-denominated commodities to be more expensive for countries with other currencies.

Led by financial and consumer companies, the Standard & Poor's 500 Index declined 4.17 points, or 0.3 percent, while the ICE Dollar Index rose to 77.03 from 77.44. Meanwhile, front month natural gas prices increased to its highest levels since August 19, as heating fuel demand rose on cold weather anticipation. Forecasts showed below average temperatures across the U.S. from Nov. 14 to Nov. 22, as reported by the National Weather Service. Henry Hub natural gas rose 12.2 cents to settle at $4.21 per thousand cubic feet on the New York Mercantile Exchange.

According to the Energy Information Administration's (EIA) report, 2010 U.S. natural gas production should increase 2.5 percent from 2009 levels and 0.2 bcf a day for October's marketed natural gas production. The intraday range for natural gas was $4.06 to $4.23. RBOB gasoline for December contract also settled up Tuesday, adding 0.65 cent, to $2.19 a gallon the highest since Aug. 3. Gasoline prices fluctuated between $2.16 and $2.20 Tuesday.

Courtesy of Rigzone.Com


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