Commodity Corner: Oil Rises $1.37
The crude oil price for August delivery rose Thursday on reports of positive economic indicators from the U.S. Department of Labor and the International Monetary Fund (IMF).
Oil settled at $75.44 a barrel, a $1.37 improvement from Wednesday, after the Labor Department released its weekly unemployment insurance claims report. According to the agency, the number of seasonally adjusted initial claims for jobless benefits fell by 21,000 last week compared to the 475,000 figure for the week ending June 26. Also, the IMF reported that the pace of the world economy's recovery is better-than-expected.
The IMF projects that world economic output should grow by 4.6% this year, beating an April 2010 projection by 0.4%. Moreover, it anticipates a 3.3% growth rate for the U.S. this year a 0.2% improvement from April. In the case of China, the IMF sees a 0.5% improvement from the April forecast of 10%.
The IMF does not expect growth rates to be as robust in 2011, however, stating that sovereign and financial-sector uncertainties in the Eurozone could spread and create problems for other regions. In fact, its 2011 economic growth projections are lower for World Output (4.3%), the U.S. (2.9%), and China (9.6%).
The intraday range for oil was $74.38 to $75.90.
The front-month natural gas price declined by 17 cents to settle at $4.40 per thousand cubic feet Thursday. Influencing the downward movement were new U.S. Department of Energy figures showing that the amount of natural gas in storage rose by 78 billion cubic feet to 2.76 trillion cubic feet as of July 2. For the same period last year, 74 Bcf of gas was added. The five-year (2005-2009) average for the period is 80 Bcf. Natural gas traded from $4.36 to $4.62 on Thursday.
The price of a gallon of gasoline increased by two cents Thursday, settling at $2.05. Gasoline peaked at $2.07 and bottomed out at $2.03.