Commodity Corner: Crude Falls on Declining Demand
Crude futures for November delivery edged lower Thursday as government reports showed demand for U.S. petroleum dropped to its lowest level in more than 10 months.
Front-month crude fell 32 cents, settling at $82.69 a barrel on the New York Mercantile Exchange.
According to the U.S. Department of Energy's Energy Information Administration (EIA), oil inventories decreased by 400,000 for the week ended Oct. 8 while gasoline stockpiles decreased by 1.8 million barrels to 218.2 million barrels. Analysts claim crude fell due to an eight-and-a-half month low in imports, causing inventories to decline. A weaker economy decreases demand for crude. First-time claims for unemployment insurance increased by 13,000 from the previous week, reported the U.S. Department of Labor.
Additionally, the euro strengthened against the dollar. The euro rose 0.6 percent, while the ICE dollar index was down 0.6 percent. A weaker dollar heightens the appeal of commodities, making it cheaper for foreign currencies. The falling dollar has kept oil futures above the $80 mark for more than a week.
The intraday range for oil prices was $82.21 to $84.12.
November natural gas lost 3.9 cents to settle at $3.66 per thousand cubic feet on the NYMEX Thursday. The EIA reported an increase of 91 billion cubic feet for natural gas inventories. Natural gas stockpiles for the week ended Oct. 8 were 3.59 trillion cubic feet. Natural gas traded from $3.60 to $3.76 Thursday.
The price of gasoline also settled lower Thursday at $2.14 a gallon. During Thursday's trading session, gasoline prices fluctuated between $2.12 and $2.185.