Commodity Corner: Crude Rallies to 2-Year High on Economic Optimism
Crude rallied Thursday to a two-year high on rising equities and an increase in economic optimism.
Oil for January delivery gained $1.25, settling at $88.00 a barrel Thursday. Oil prices peaked at $88.13 during Thursday's trading session and bottomed out at $86.27.
According to the U.S. Department of Labor, initial unemployment benefit claims increased by 26,000 to 436,000 from the previous week. However, the four-week moving average decreased by 5,750—a two-year low.
In addition, reports on an increase in retail and the housing market sales also boosted the U.S. economy. The National Association of Realtors reported a 10-percent increase in pending home sales for the month of October after dropping 1.8% in September.
The greenback fell Thursday against the euro on news that the European Central Bank will delay its withdrawal of stimulus measures and keep its interest rate at a record low of 1 percent. A weaker dollar increases oil prices making it cheaper for buyers with foreign currencies.
Likewise, gasoline futures rose to a six-month high Thursday, closing the trading session at $2.36 a gallon. The nearly six-cent increase came as East Coast supplies declined.
Investors fear that imports may decline on tightening supply conditions in the New York harbor. RBOB gasoline fluctuated between $2.29 and $2.36 Thursday.
Front-month natural gas futures continued to climb higher Thursday for the eleventh straight day. Natural gas lost earlier rebounds, gained from cooler weather, after inventories fell below market expectation. The Energy Information Administration reported a 23 billion cubic feet drop for the week ended Nov. 23.
Natural gas prices settled at $4.34 per thousand cubic feet, up 7.4 cents from the previous day. The intraday range for natural gas was $4.20 to $4.38.