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Oil gets boost from economic data, Moscow bombing
Source: Agencies |
March 30, 2010, Tuesday
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OIL prices got a boost yesterday from positive economic indicators and worries about terrorist bombings in Moscow.
Benchmark crude for May delivery jumped US$2.17 to settle at US$82.17 a barrel on the New York Mercantile Exchange.
At least 38 people died and more than 60 were hurt after two female suicide bombers blew themselves up in Moscow subway stations during rush-hour.
PFG analyst Phil Flynn said, "Because Russia is a major oil producer, there are fears that there could be more attacks in the future," and this could cramp oil supply from the country.
Flynn said traders reacted emotionally and demand is still the key factor. "I think more than anything oil is going back up on increased demand expectations and basically hopes that the situation in Europe is under control," he said.
Flynn also noted that today's rise in crude is "exaggerated a little because of the upcoming holidays."
Energy analyst Stephen Schork said he wasn't surprised by the crude price jump, given the news from Moscow, the weaker dollar and "end-of-quarter book squaring."
"It's the last three days of the quarter, large swings in volatility at this point are not to be unexpected," he said.
The Commerce Department said consumer spending rose for the fifth consecutive month in February. That raised hopes that oil and gasoline demand would pick up as well.
Meanwhile, European markets rose with investors more upbeat about Greece's ability to handle its debt problems. That put some pressure on the dollar, making crude cheaper for investors with other currencies.
Gasoline pump prices edged down slightly for motorists gearing up for Passover, Easter and spring break road trips.
Nationwide average retail prices shed less than a penny overnight to US$2.80 a gallon. Pump prices are 9.7 cents higher than a month ago and 75.5 cents more expensive than the same time last year, according to AAA, Wright Express and Oil Price Information Service. Motorists are paying 14.9 cents per gallon more now than they were at the start of the year.
The Energy Information Administration's weekly fuel update released yesterday afternoon pegged the national average for a gallon of regular at US$2.80 last week, down two cents from the week before and 75 cents higher than a year ago. California drivers paid the most, at an average of US$3.09 a gallon. Drivers in Gulf Coast states paid an average of US$2.68 a gallon.
Gasoline prices have climbed in recent weeks as refineries began producing more expensive blends to reduce pollution in warmer weather. Last Monday, the national average gasoline price was US$2.82 a gallon, the highest since October 2008.
In other Nymex trading, heating oil for April delivery rose 4.91 cents to settle at US$2.1188 a gallon. With trading on the April contract set to expire Wednesday, investors focused on the May contract, which added 4.73 cents to settle at US$2.1286 a gallon.
Gasoline for April delivery gained 5.39 cents to settle at US$2.2613 a gallon, but most of trading has moved to the May contract, which settled at US$2.2627, up 5.42 cents.
Natural gas fell 3 cents to settle at US$3.842 per 1,000 cubic feet on the final day of the April contract. Most of the trading already has moved to the May contract, which fell 1.4 cents to US$3.916 per 1,000 cubic feet.
In London, Brent crude added US$1.88, settling at US$81.17 on the ICE futures exchange.
Benchmark crude for May delivery jumped US$2.17 to settle at US$82.17 a barrel on the New York Mercantile Exchange.
At least 38 people died and more than 60 were hurt after two female suicide bombers blew themselves up in Moscow subway stations during rush-hour.
PFG analyst Phil Flynn said, "Because Russia is a major oil producer, there are fears that there could be more attacks in the future," and this could cramp oil supply from the country.
Flynn said traders reacted emotionally and demand is still the key factor. "I think more than anything oil is going back up on increased demand expectations and basically hopes that the situation in Europe is under control," he said.
Flynn also noted that today's rise in crude is "exaggerated a little because of the upcoming holidays."
Energy analyst Stephen Schork said he wasn't surprised by the crude price jump, given the news from Moscow, the weaker dollar and "end-of-quarter book squaring."
"It's the last three days of the quarter, large swings in volatility at this point are not to be unexpected," he said.
The Commerce Department said consumer spending rose for the fifth consecutive month in February. That raised hopes that oil and gasoline demand would pick up as well.
Meanwhile, European markets rose with investors more upbeat about Greece's ability to handle its debt problems. That put some pressure on the dollar, making crude cheaper for investors with other currencies.
Gasoline pump prices edged down slightly for motorists gearing up for Passover, Easter and spring break road trips.
Nationwide average retail prices shed less than a penny overnight to US$2.80 a gallon. Pump prices are 9.7 cents higher than a month ago and 75.5 cents more expensive than the same time last year, according to AAA, Wright Express and Oil Price Information Service. Motorists are paying 14.9 cents per gallon more now than they were at the start of the year.
The Energy Information Administration's weekly fuel update released yesterday afternoon pegged the national average for a gallon of regular at US$2.80 last week, down two cents from the week before and 75 cents higher than a year ago. California drivers paid the most, at an average of US$3.09 a gallon. Drivers in Gulf Coast states paid an average of US$2.68 a gallon.
Gasoline prices have climbed in recent weeks as refineries began producing more expensive blends to reduce pollution in warmer weather. Last Monday, the national average gasoline price was US$2.82 a gallon, the highest since October 2008.
In other Nymex trading, heating oil for April delivery rose 4.91 cents to settle at US$2.1188 a gallon. With trading on the April contract set to expire Wednesday, investors focused on the May contract, which added 4.73 cents to settle at US$2.1286 a gallon.
Gasoline for April delivery gained 5.39 cents to settle at US$2.2613 a gallon, but most of trading has moved to the May contract, which settled at US$2.2627, up 5.42 cents.
Natural gas fell 3 cents to settle at US$3.842 per 1,000 cubic feet on the final day of the April contract. Most of the trading already has moved to the May contract, which fell 1.4 cents to US$3.916 per 1,000 cubic feet.
In London, Brent crude added US$1.88, settling at US$81.17 on the ICE futures exchange.
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