Commodity Corner: Oil Passes the $81 Mark
September crude oil futures gained more than $2 Monday, thanks to rallying equities markets and positive news about the U.S. manufacturing sector's performance in July.
Oil settled at $81.34 a barrel, compared to $78.95 on Friday. Surging global stock markets, buoyed by strong earnings reports, contributed to the rise. Asian markets such as Hong Kong's Hang Seng and Taiwan's TSEC grew nearly 2% in value, but European indexes including London's FTSE 100 and Paris' CAC 40 posted more impressive gains of 2.65% and 2.99%, respectively. In New York, the Dow Jones Industrial Average rose 1.99% while the S&P 500 and Nasdaq climbed 2.22% and 1.80%, respectively, as of 4 p.m.
Crude oil also benefited from the findings of an Institute of Supply Management survey Monday indicating that economic activity in the U.S. manufacturing sector expanded in July, marking the 12th consecutive month of growth. Chemicals, Plastics & Rubber Products, and eight other manufacturing industries expanded in July. The news was not all positive, however, as ISM noted contractions in four industries. In fact, ISM pointed out that July's increase in manufacturing activity was lower than that of the previous month. Moreover, the organization of supply executives noted that quoting activity and sales are slow and backlog is dropping.
Monday's intraday range for crude oil was from $78.83 to $81.72.
Also on the upswing Monday was the September gasoline futures price, which settled a nickel higher at $2.17 a gallon. Gasoline traded from $2.12 to $2.19.
Natural gas, meanwhile, ended its recent streak of gains by settling 22 cents lower at $4.70 per thousand cubic feet. The September futures price fluctuated within a band from $4.68 to $5.01.