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Oil settles higher, gas pump prices still sliding
Source: Agencies |
May 19, 2011, Thursday
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Investors seized on the weaker dollar Yesterday to buy a wide range of commodities, including oil, which reversed two days of losses to settle above US$100 per barrel for the first time in a week.
Benchmark West Texas Intermediate crude for June delivery rose US$3.19, or 3.3 percent, to settle at US$100.10 per barrel on the New York Mercantile Exchange.
Oil is still down about 12 percent since hitting a two-year high of US$113.93 a barrel on April 29. The dollar has risen 3.5 percent since the beginning of May. Oil is priced in dollars and tends to fall as the dollar rises and makes it less attractive to investors holding other currencies.
"They're just moving in close tandem right now," said oil analyst Jim Ritterbusch. "It's been like this for the past few days."
Yesterday, the dollar lost ground to foreign currencies. That propped up crude and other dollar-based commodities; including metals like gold, silver and copper, along with grains, cotton and sugar.
Oil got an additional boost after the Energy Information Administration reported that the nation's oil supplies were unchanged last week.
Analyst and trader Stephen Schork noted that supplies dropped at the key delivery point for benchmark crude in Cushing, Okla., because TransCanada temporarily shut down its Keystone pipeline to repair a minor oil leak. The pipeline can deliver more than a half million barrels of oil per day from Alberta. It was back online on Friday, TransCanada spokesman Terry Cunha said.
Refineries also cranked up production last week, increasing their capacity by 1.5 percentage points. That helped keep prices up despite an overall drop in petroleum demand. Wholesale gasoline demand also declined for the eighth straight week, when compared with a year ago, according to the EIA.
On Tuesday MasterCard SpendingPulse's weekly survey of retail gas demand also showed a drop for the eighth straight week.
This month's drop in oil is the main reason gas pump prices continue to fall. Gas dropped nearly 2 cents on Yesterday to a national average is US$3.926 per gallon (less than a dollar a liter). Still, a gallon (3.79 iters) of regular is 9.3 cents higher than a month ago and US$1.067 more than a year ago.
In other Nymex trading for June contracts, heating oil added 6.08 cents to settle at US$2.9059 per gallon (3.79 liters) and gasoline futures rose 3.62 cents to settle at US$2.9555 per gallon (3.79 liters). Natural gas gained 2 cents at US$4.266 per 1,000 cubic feet (28.32 cubic meters).
In London, Brent crude climbed US$2.31, or 2.1 percent, to settle at US$112.30 per barrel on the ICE Futures exchange.
Benchmark West Texas Intermediate crude for June delivery rose US$3.19, or 3.3 percent, to settle at US$100.10 per barrel on the New York Mercantile Exchange.
Oil is still down about 12 percent since hitting a two-year high of US$113.93 a barrel on April 29. The dollar has risen 3.5 percent since the beginning of May. Oil is priced in dollars and tends to fall as the dollar rises and makes it less attractive to investors holding other currencies.
"They're just moving in close tandem right now," said oil analyst Jim Ritterbusch. "It's been like this for the past few days."
Yesterday, the dollar lost ground to foreign currencies. That propped up crude and other dollar-based commodities; including metals like gold, silver and copper, along with grains, cotton and sugar.
Oil got an additional boost after the Energy Information Administration reported that the nation's oil supplies were unchanged last week.
Analyst and trader Stephen Schork noted that supplies dropped at the key delivery point for benchmark crude in Cushing, Okla., because TransCanada temporarily shut down its Keystone pipeline to repair a minor oil leak. The pipeline can deliver more than a half million barrels of oil per day from Alberta. It was back online on Friday, TransCanada spokesman Terry Cunha said.
Refineries also cranked up production last week, increasing their capacity by 1.5 percentage points. That helped keep prices up despite an overall drop in petroleum demand. Wholesale gasoline demand also declined for the eighth straight week, when compared with a year ago, according to the EIA.
On Tuesday MasterCard SpendingPulse's weekly survey of retail gas demand also showed a drop for the eighth straight week.
This month's drop in oil is the main reason gas pump prices continue to fall. Gas dropped nearly 2 cents on Yesterday to a national average is US$3.926 per gallon (less than a dollar a liter). Still, a gallon (3.79 iters) of regular is 9.3 cents higher than a month ago and US$1.067 more than a year ago.
In other Nymex trading for June contracts, heating oil added 6.08 cents to settle at US$2.9059 per gallon (3.79 liters) and gasoline futures rose 3.62 cents to settle at US$2.9555 per gallon (3.79 liters). Natural gas gained 2 cents at US$4.266 per 1,000 cubic feet (28.32 cubic meters).
In London, Brent crude climbed US$2.31, or 2.1 percent, to settle at US$112.30 per barrel on the ICE Futures exchange.
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