Commodity Corner: Crude Tumbles on S&P Debt Outlook
Front-month crude futures plummeted Monday after Standard & Poor (S&P) changed its outlook for U.S. debt from stable to negative. The shift in outlook has increased concerns of the U.S. economy's stability and cuts in government spending.
Oil prices fell by $2.54 Monday, settling at $107.12 a barrel on the New York Mercantile Exchange (NYMEX). Prices fluctuated between $106.54 and $109.44. The S&P move came on the possibility that policymakers may not reach an agreement on how to address long-term fiscal pressures.
Over the weekend, China's central bank announced it would increase bank reserve requirements. In its fourth attempt this year, China hopes to control inflation and curb energy demand. Following the U.S., China is the world's second largest energy consumer.
Additionally, Saudi Arabia's Oil Minister Ali al-Naimi said Sunday that the kingdom has reduced oil production by 800,000 barrels due to lack of demand. Crude output was 8.3 million barrels a day last month, compared to February's 9.1 million barrels a day. Naimi anticipates an increase in April production.
On Monday, the greenback rose against the euro and other currencies further pressuring prices. The euro fell on concerns that Greece will have to restructure its debt. A stronger dollar makes oil more expensive, less attractive to foreign buyers.
May natural gas prices fell for a second day Monday, settling nearly seven cents lower at $4.14 per thousand cubic feet. Analysts do not foresee any near-term pressure increasing prices due to near-average storage and below-average prices. The intraday range for natural gas was $4.087 to $4.27 per thousand cubic feet.
Likewise, gasoline futures fell 1.1 percent, peaking at $3.29 before bottoming out at $3.23. Gasoline priced ended Monday's trading session at $3.25 a gallon.
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- USA Oil and Gas Job Figures Jump
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension