Commodity Corner: Oil Rises on Dollar Decline
The price of a barrel of crude oil for December delivery settled at $82.52 Monday, a 83-cent increase from the previous session.
The increase stems largely from the weakening of the U.S. Dollar, which fell 0.34% against the euro Monday. Pending Federal Reserve action to increase the U.S. money supply in order to buy more federal government debt has placed downward pressure on the dollar. A weaker dollar tends to boost demand for oil from buyers holding other currencies.
Contributing to the bullish sentiment for oil was a report showing that existing home sales in the U.S. increased 10% last month. According to the National Association of Realtors, a housing recovery is occurring albeit in the early stages. An official with the trade group said the duration and impact of a foreclosure moratorium will influence how "choppy" the recovery will be.
December crude traded from $81.45 to $83.28 Monday.
Milder-than-normal temperatures in typically heating-depending U.S. regions such as the Northeast and Midwest have quashed demand for natural gas recently. Monday was no exception to this trend, with November natural gas settling a penny lower at $3.32 per thousand cubic feet. The front-month gas price fluctuated between $3.29 and $3.40.
Labor unrest at French refineries and fuel depots is expected to reduce gasoline exports to the U.S. market. As a result, November gasoline futures rose two cents to settle at $2.08 a gallon. Gasoline peaked at $2.10 and bottomed out at $2.05.