Commodity Corner: Oil Down Nearly 5% for the Week
The price of crude oil for October delivery fell for the fifth straight day Friday, settling 91 cents lower at $73.66 a barrel and ending a week in which the front-month price declined by 4.6%.
Enbridge's resumption of normal service Friday on Line 6A of its key Lakehead pipeline system in the Midwest had a dampening effect on oil futures. In addition, a report by Thomson Reuters and the University of Michigan found that three in four American households expect no improvement in their household finances over the next year. Furthermore, thanks to unimpressive income and employment prospects, more than 50% of the households surveyed expect their inflation-adjusted incomes to decline during the same period. American consumers, the survey found, are focusing more on reducing debt and saving what money they can. This supports the view that very slow economic growth will be with us for an extended period.
Richard T. Curtin, Director of Thomson Reuters/University of Michigan Surveys of Consumers, observed that consumers' pessimism appears to be more drawn out this recession compared to previous economic downturns. "Now economic uncertainty reigns," he stated. "It is far too early to declare that consumer pessimism has become the new default outlook of consumers. Nonetheless, the economic uncertainty that now exists has caused consumers to reduce their spending and increase their precautionary saving."
Friday's intraday trading range for crude oil was $73.16 to $75.25.
October natural gas lost 4 cents Friday to settle at $4.02 per thousand cubic feet. However, gas ended the week 2% higher. Friday's change of course a decline following a string of rallies over the past week -- stems from traders' profit-taking. The front-month natural gas price peaked at $4.11 and bottomed out at $3.99 Friday.
October gasoline remained flat at $1.92 a gallon Friday after trading between $1.90 and $1.95. Gasoline is down 3% for the week.