After a volatile trading session on the New York Mercantile Exchange Monday, crude oil futures settled back into positive territory above $81 a barrel, trading higher alongside rising equities as the dollar lost ground to a rebounding euro.
As the April front-month contract rolled off the board, the price of light, sweet crude oil traded higher by more than two quarters on the dollar, ultimately closing at $81.25 a barrel. May's front-month crude futures settled on the upside as well at $81.60 a barrel.
Also gaining a positive foothold in the oil complex, NYMEX gasoline futures remained steady at $2.26 a gallon at the close of Monday's session.
"It looks as if the crude market is continuing to track alongside the price moves in the equity market," underscored Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "As long as we're in this $77-$83 area, the market has a lot of freedom to range around," the analyst said.
Today, commodities were spurred higher as equities rallied with the passage of a bill to overhaul the U.S. healthcare system. Additionally, investors abandoned the dollar's safe havens in favor of riskier markets, while the euro pared losses against the U.S. currency.
"I think the market is waiting on the next factor to help reestablish a rally up to this year's highs, which does seem to indicate that oil is overvalued without any supportive fundamentals," McGillian added.
Natural Gas Price Loses Steam
On the domestic energy front, natural gas spot prices at the Henry Hub for April delivery posted a loss to $4.08 Mcf.
"Natural gas ended last week with a little bit of short covering, and coming in today the question was whether the market would move back above $4," McGillian noted.
"We closed the day at new 5- ½ month lows, and now we are asking what kind of support will $4 prove because fundamentals are still weak," the analyst concluded.
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