Statements by Federal Reserve Chairman Ben Bernanke affected oil prices for the second straight day this week.
In a report to Congress Wednesday, Bernanke observed that the economic recovery apparently is "on track" and that he expects it to continue through 2011. In addition, he asserted that Europe's debt problems and a lackluster U.S. real estate market would not stymie the economy's forward momentum. Bernanke did include a caveat, however: the Fed's prediction of a 3.5% economic growth rate this year likely would yield a "slow reduction" in the country's 9.7% unemployment rate.
The Fed chairman's overall positive report, coupled with a government report that crude inventories fell more than expected last week as well as signs of a strengthening Chinese economy, were enough to boost the July settlement price for oil by $2.39 to $74.38 Wednesday. The intraday trading range was $72.03 to $74.96.
Bernanke also noted that the Fed would intervene as necessary to help advance the economic recovery. On this front, his words helped the July gasoline futures price to jump 5 cents per gallon. Gasoline settled at $2.04 Wednesday after trading from $1.98 to $2.05.
Natural gas futures continued to lose ground Wednesday, falling 13 cents to $4.68 per thousand cubic feet. The high and low prices for gas during the day's trading were $4.84 and $4.70, respectively.
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