Commodity Corner: Crude Falls as Dollar Rebounds
Crude futures fell Thursday as economic worries resurfaced and the dollar rebounded against the euro.
Oil prices for December delivery settled at $80.56 a barrel, down 2.4 percent from the previous day. Prices continued to feel the ripple from China's decision Tuesday to increase interest rates. As the Chinese government reported, projected third-quarter gross domestic product growth fell to 9.6 percent from a 10.3 percent growth rate in the second-quarter.
The second-largest oil consumer after the U.S., China, is estimated to account for approximately 40 percent of an expected 2.1 million-barrel-per-day increase in global oil demand this year and approximately one-third of a 1.2 million-b/d increase next year, according to the International Energy Agency.
The dollar rose 0.3 percent against the euro Thursday after falling earlier as much as 0.6 percent.
Light, sweet crude futures traded between $80.09 and $82.70.
Likewise, natural gas futures plummeted to new 13-month lows Thursday. Henry Hub natural gas decreased 4.8 percent and settled at $3.37 per thousand cubic feet.
The U.S. Energy Information Administration (EIA) reported that natural gas inventories grew by 93 billion cubic feet last week, marking the sixth consecutive above-average weekly build. According to the inventory report, the U.S. had 3.68 trillion cubic feet of natural gas in underground storage last week.
The National Hurricane Center observed a tropical storm headed toward Mexico's Yucatan Peninsula Thursday. The system, Tropical Storm Richard, formed in the northwestern Caribbean Sea. Meteorologists predict that the storm may continue into the Gulf of Mexico, but major impact should be prevented by the high wind shear.
The intraday range for natural gas was $3.35 to $3.54 Thursday.
November delivery gasoline prices settled at the lowest point since Sept. 29 at $2.04 a gallon, after peaking at $2.08 and bottoming out at $2.03.