Commodity Corner: Crude Retreats, Concern Lingers
Crude prices retreated from a two-year high Tuesday, settling at $90.77 a barrel.
As the political unrest in Egypt continues, so does the concern over the disruptions in the Suez Canal. Although news of the Egyptian President Hosni Mubarak not running for re-election has eased some concern, traders remain wary of a possible domino-effect making its way to the U.S. According to analyst Phil Flynn, an orderly transition means less of a risk to oil supply.
Adding to the global distress, Jordan's King Abdullah expressed concern over Egypt's political turmoil spreading to its neighboring countries.
In the meantime, high stockpiles in Cushing, Okla.—the delivery point for the New York Mercantile Exchange (NYMEX)—have helped curb crude prices.
Light, sweet crude for March delivery fluctuated between $90.44 and $92.45 a barrel Tuesday.
Natural gas also settled lower Tuesday, losing 1.75% as forecasts predict normal-to-average temperatures in the U.S. later this month. Warmer temperatures reduce the need for heating and in turn, decrease demand for natural gas. Natural gas ended Tuesday's trading session at $4.35 and traded between $4.32 and $4.43.
On the other hand, March-contract gasoline rose 1.93 cents, settling at $2.52 a gallon, peaking at $2.53 and bottoming out at $2.48 Tuesday.