Commodity Corner: Crude Soars as Dollar Tumbles
Oil climbed to a six-month high Thursday as the dollar fell on news of the Fed's latest economic stimulus effort.
Crude for December delivery added $1.80 Thursday, settling at $86.49 a barrel on the New York Mercantile Exchange (NYMEX).
The Federal Reserve's decision to buy an additional $600 billion in bonds contributed to the dollar plummeting to a nine-month low against the euro. The dollar has been weakening since late August in anticipation of additional quantitative easing. As more money is printed the value of the dollar weakens, leading to cheaper commodities for foreign currency holders. The greenback fell to $1.42 against the euro Thursday, the lowest since Jan. 20.
Meanwhile, the Organization of Petroleum Exporting Countries (OPEC) bumped its global oil consumption estimates by 800,000 barrels a day for 2014. OPEC's 5.1 percent, or 89.9 million barrels a day, increase signifies a continuing recovery.
Crude futures traded from $84.92 to $86.83 Thursday.
Natural gas prices settled up 2 cents Thursday at $3.86 per thousand cubic feet on the NYMEX. Although the U.S. Energy Information Administration reported 67 billion cubic feet in gas inventories for the week ended Oct. 29, analysts predict traders buying gas futures ahead of cooler temperatures. Gas consumption increases in periods of extreme temperatures.
The intraday range for natural gas was $3.74 to $3.90.
Gasoline prices also finished higher Thursday, settling 4.15 cents higher at $2.18 a gallon. December gasoline peaked at $2.18 after bottoming out at $2.14.