Traders' enthusiasm Monday about the Chinese government's decision to stop pegging the yuan to the greenback did not carry over into Tuesday, and oil futures settled 61 cents lower at $77.21 per barrel.
In fact, the currency float -- initially seen as a means of boosting China's oil demand -- was increasingly viewed as a potential drag on that country's export market as prices of Chinese goods would go up. Also hurting oil demand was a report indicating a decrease in U.S. existing home sales. According to the National Association of Realtors, sales of existing single-family houses, townhomes, condominiums, and co-ops fell 2.2 percent in May from the previous month. The intraday range for crude oil was $76.53 to $78.10.
The July natural gas futures price fell again Tuesday, settling 11 cents lower at $4.76 per thousand cubic feet. In the past few weeks, predictions of above-normal summer temperatures and an active Atlantic hurricane season helped to lift gas prices well above $5.00. Even the possibility of a tropical storm forming in the Caribbean within days failed to reverse the most recent decline, which stems from profit-taking by producers. Natural gas traded from $4.69 to $4.89 Tuesday.
The price of a gallon of gasoline declined by a penny Tuesday, settling at $2.13. Gasoline futures peaked at $2.16 and bottomed out at $2.12 Tuesday.
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