After a bout of volatile trading on the New York Mercantile Exchange Tuesday, U.S. crude oil futures closed just under the session's intra-day high above $79 as earlier gains were trumped by the greenback's triumphant rally against a major international currency.
Lifted at the onset of thin trading by geopolitical concerns, as well as the market's more optimistic outlook concerning potentially higher fuel demand to warm a colder U.S. market, the price of light, sweet crude oil for February delivery collected an additional 10 cents today, closing at $78.87 a barrel on the NYMEX.
Conversely, natural gas spot prices at the Henry Hub for January delivery ultimately fell to $5.814 per thousand cubic feet after briefly crossing over the $6-threshold. According to the U.S. Department of Energy, natural gas production has accelerated by nearly 2% from the previous month, which had added some downside pressure on rising prices.
Mixed Bag of News Pressures Crude
Spanning the gamut from a better-than-expected improvement in consumer confidence in December to flat housing data and flagging gasoline demand tracked by MasterCard SpendingPluse on the domestic front, a plethora of factors affected today's seesawing oil prices.
Both the equities and commodities markets were bolstered early on by a wave of good economic cheer ahead of the new year, as well as tensions between Russia and Ukraine over oil supplies to Europe. However, concerns ebbed after Ukraine's state-run Naftogaz agreed to a 30% increase in the transit tariff for Russian oil supplies, and some market participants pulled cash out of commodities to support a strengthening dollar and its renewed safe-haven appeal instead.
"The oil market just couldn't make a decision based on one thing today," observed Phil Flynn, vice president in charge of research for PFG Best in Chicago. "There's all this talk about colder weather, which has helped to support energy prices on the hope of stronger demand as winter hits us with a vengeance. But at the same time, the dollar rallied harder at the end of the day and hit another weekly high against the yen, which put downward pressure on commodities."
"There are also some concerns on the geopolitical front," the analyst added. "Whether it be Iran or what's gone down between Russia and the Ukraine back and forth to avert a cutoff in supplies, those concerns are probably keeping investors on the sidelines until the end of the year."
Most Popular Articles
From the Career Center
Jobs that may interest you