Extending its sell-off for a third consecutive session, NYMEX crude slipped to $80 a barrel ahead of the weekend on downbeat economic data and geopolitical concerns. Additionally, NYMEX gasoline futures also trickled down Friday to $2.21 a gallon.
"Today, there were market conditions that should have been supportive," commented Bill O'Grady, chief markets strategist at St. Louis-based Confluence Investment Management LLC. "However, in the broader context, prices are still holding up pretty well."
The analyst pointed to a weaker greenback, a bailout arrangement for cash-strapped Greece and an overseas geopolitical flare-up resulting in the sinking of a South Korean naval ship as usual impetuses for oil bulls to take control of the market.
Overshadowing these bullish factors, however, the U.S. Commerce Department today announced a downward revision in the 4Q GDP.
On a positive note, O'Grady sees gasoline consumption steadily creeping higher as the summer driving season draws near, a factor helping to fuel the market's optimism for improving demand.
Natural Gas Notches Lower
Also posting a negative movement on the NYMEX today, natural gas spot prices at the Henry Hub settled a notch lower at $3.87 per thousand cubic feet.
"Seasonally, this is a weaker time of year," O'Grady underscored. "But, it has been a good season. People forget we went into the winter season with some 4 Tcf in storage, and we're going to end up with around 1.7 Tcf going into the refill season."
"Had we not had that cold of a winter, who knows how low prices would have gone. We may have had prices below $2 Mcf," the analyst added.
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