Commodity Corner: Crude Climbs to Two-Year High
Crude settled at a two-year high Tuesday amid continued optimism for a U.S. economic recovery. Crude for February delivery settled at $89.82 a barrel, its highest level since October 2008. The day's high was $89.97, with a low of $89.06. Traders remain wary of placing large bets during the holiday season.
According to analysts, holiday retail sales are a vital marker of the U.S. economy. A rise in holiday shopping indicates increasing optimism about the economy in the upcoming year. Additionally, the Standard & Poor's 500 Index gained 0.6 percent, the most since September 18, 2008—the trading session prior to the Lehman Brothers bankruptcy filing.
Meanwhile, Chinese government reports claim that China—the second-largest oil-consuming country—nearly doubled its net oil-product imports last month.
Likewise, gasoline futures also increased Tuesday. Gasoline prices ended the trading session at $2.40 a gallon after fluctuating between $2.37 and $2.40 a gallon. The continued problem at the Hovensa refinery in St. Croix, Virgin Islands, tightens supplies in the Northeast. The refinery has been shut down for several weeks due to trouble restarting a key unit used to process crude oil. The repairs may take another week.
Due to forecasts of milder temperatures, natural gas futures fell Tuesday. The three-week drop came as temperatures rose in the eastern U.S. Front-month gas futures ended Tuesday's trading session at $4.06 per thousand cubic feet, 17.8 cents lower than the previous day. The intraday range for natural gas Tuesday was $4.06 to $4.245.