Crude futures rallied to a near-six-month high Tuesday as the dollar fell ahead of the U.S. Federal Reserve's anticipated decision to implement another stimulus plan.
Light, sweet crude for December delivery rose 95 cents, settling at $83.90 a barrel. Analysts expect the Fed to announce a plan to purchase $500 billion of long-term securities during its meeting this week. The plan is intended to accelerate growth, decrease unemployment, increase inflation, and boost flagging economic recovery. Economic growth or a weaker dollar contributes to an increase in oil prices.
Meanwhile, the ICE Dollar Index, which measures the dollar against six major currencies, slid to its lowest level in two weeks at $76.74. A weaker dollar increases the commodity's appeal, making it cheaper for foreign currencies to purchase.
Crude futures fluctuated Tuesday between $82.83 and $84.34.
Due to cooler temperatures, natural gas for December delivery climbed up 3.8 cents to settle at $3.87 per thousand cubic feet. Analysts hope the colder weather will drive demand because U.S. inventory levels are nearing record levels this month. U.S. natural gas stockpiles at the end of last week were at 3.75 trillion cubic feet; the record high was reached in November at 3.84 trillion cubic feet. Natural gas traded between $3.75 and $3.93 Tuesday.
Reformulated gasoline blendstock also settled higher, gaining 1.67 cents to reach $2.11 a gallon Tuesday. RBOB gasoline peaked at $2.12 and bottomed out at $2.09.
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