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Oil prices settle a little higher
Source: Agencies |
April 7, 2010, Wednesday
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OIL and gasoline prices barely budged yesterday, as traders took a break from a recent rally driven by signs of an improving economy.
Benchmark crude for May delivery rose 22 cents to settle at US$86.84 a barrel on the New York Mercantile Exchange. Earlier prices touched a new 18-month high of US$87.09 a barrel. Oil prices have climbed 24 percent since February.
Crude traded between US$69 and US$84 for about nine months before breaking above that range last week. On Monday, reports showed improvements in services businesses and in the housing market.
Oil analyst Stephen Schork said Friday's encouraging jobs data helped fuel crude's rally, since an uptick in manufacturing jobs should help boost domestic energy demand "from coal to fuel furnaces to diesel to fuel freight transport." The Labor Department said employers added 162,000 jobs in March, the largest job gain in three years.
Still, American consumers are looking at a 9.7 percent unemployment rate and gasoline prices that have reached a high for the year.
The average U.S. retail price for gas hit US$2.83 per gallon yesterday, according to AAA, Wright Express and Oil Price Information Service. The price is 79.1 cents a gallon higher than a year ago.
Many oil analysts expect pump prices to rise to US$3 per gallon (79 cents a liter), a price point that could trigger consumer cutbacks in fuel and other spending.
"Increasing gasoline prices at the pump...(has) a tendency to strangle growth," Schork warned.
Schork thinks the nation's economic recovery remains fragile and the already high unemployment rate could rise as discouraged workers hunt for jobs that haven't yet materialized.
A stronger dollar and weaker equities tempered oil prices in yesterday trading. A stronger dollar makes dollar-denominated crude more expensive for holders of other currencies.
Meanwhile, the Energy Information Administration released its monthly short-term energy outlook, which did little to move energy prices. The outlook remained mostly in line with last month's report except for a sharp reduction in the natural gas price forecast. EIA now expects benchmark natural gas to price at US$4.44 per million Btu on average this year, down from US$5.17 per million Btu predicted in March. EIA cut the outlook mainly because of an upward revision of 2 billion cubic feet per day to the 2010 domestic natural gas production forecast.
In other Nymex trading in May contracts, heating oil rose a fraction of a penny to settle at US$2.2683 a gallon, and gasoline dropped 0.19 cent to close at US$2.3483 a gallon. Natural gas lost 18.1 cents to settle at US$4.096 per 1,000 cubic feet.
In London, Brent crude prices added 27 cents to settle at US$86.15 on the ICE futures exchange.
Benchmark crude for May delivery rose 22 cents to settle at US$86.84 a barrel on the New York Mercantile Exchange. Earlier prices touched a new 18-month high of US$87.09 a barrel. Oil prices have climbed 24 percent since February.
Crude traded between US$69 and US$84 for about nine months before breaking above that range last week. On Monday, reports showed improvements in services businesses and in the housing market.
Oil analyst Stephen Schork said Friday's encouraging jobs data helped fuel crude's rally, since an uptick in manufacturing jobs should help boost domestic energy demand "from coal to fuel furnaces to diesel to fuel freight transport." The Labor Department said employers added 162,000 jobs in March, the largest job gain in three years.
Still, American consumers are looking at a 9.7 percent unemployment rate and gasoline prices that have reached a high for the year.
The average U.S. retail price for gas hit US$2.83 per gallon yesterday, according to AAA, Wright Express and Oil Price Information Service. The price is 79.1 cents a gallon higher than a year ago.
Many oil analysts expect pump prices to rise to US$3 per gallon (79 cents a liter), a price point that could trigger consumer cutbacks in fuel and other spending.
"Increasing gasoline prices at the pump...(has) a tendency to strangle growth," Schork warned.
Schork thinks the nation's economic recovery remains fragile and the already high unemployment rate could rise as discouraged workers hunt for jobs that haven't yet materialized.
A stronger dollar and weaker equities tempered oil prices in yesterday trading. A stronger dollar makes dollar-denominated crude more expensive for holders of other currencies.
Meanwhile, the Energy Information Administration released its monthly short-term energy outlook, which did little to move energy prices. The outlook remained mostly in line with last month's report except for a sharp reduction in the natural gas price forecast. EIA now expects benchmark natural gas to price at US$4.44 per million Btu on average this year, down from US$5.17 per million Btu predicted in March. EIA cut the outlook mainly because of an upward revision of 2 billion cubic feet per day to the 2010 domestic natural gas production forecast.
In other Nymex trading in May contracts, heating oil rose a fraction of a penny to settle at US$2.2683 a gallon, and gasoline dropped 0.19 cent to close at US$2.3483 a gallon. Natural gas lost 18.1 cents to settle at US$4.096 per 1,000 cubic feet.
In London, Brent crude prices added 27 cents to settle at US$86.15 on the ICE futures exchange.
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