The August crude oil futures price fell by $2.68 a barrel Thursday, reflecting a sour demand outlook based on negative economic news on the unemployment and real estate fronts.
Oil settled at $72.95, compared to $75.63 Wednesday. The U.S. Department of Labor reported Thursday the seasonally adjusted figure for initial unemployment insurance claims rose by 13,000 last week to 472,000. As a result, the agency's four-week moving average has increased by 3,250 from the previous week's revised average of 463,250.
Also on Thursday, the National Association of Realtors (NAR) reported that pending home sales fell by a whopping 30% from April to May. NAR did anticipate the steep decline, however, because the closing deadline for a popular federal tax credit for home buyers expired Wednesday. NAR estimates that up to 180,000 buyers who had signed contracts by April 30 had not yet closed on the purchase of their new homes. Legislation passed by the U.S. Congress that would extend the deadline to September 30 awaits President Obama's signature.
For oil, the intraday range for Thursday's trading session was $72.05 to $75.40.
In contrast, the front-month contract for natural gas responded positively to news from the federal government Thursday. The natural gas futures price for August delivery rose by 23 cents to settle at $4.85 per thousand cubic feet after the U.S. Department of Energy reported that the amount of natural gas in storage was lower at the end of last week than it was for the corresponding period in 2009. According to the Energy Information Administration, 2.68 trillion cubic feet of working gas was in storage on June 25, 2010 a 1% decline from June 25, 2009. Natural gas traded from $4.53 to $4.92 Thursday.
Despite the prospect of motorists hitting the roads for a long holiday weekend in the U.S. and Canada, August gasoline futures failed to gain ground Thursday. Gasoline settled at $2.00 a gallon, a six-cent decline from the previous day's session. The contract price peaked at $2.06 and bottomed out at $1.97.
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