Commodity Corner: Oil Falls on China Interest Rate Fears
Despite a robust week of trading that brought December crude oil futures to a two-year high, crude oil ended the week lower.
Oil settled at $84.88 a barrel Friday, a $2.93 drop from Thursday and a 2.5 decrease from Monday's settlement price. Like other commodities Friday, crude oil retreated amid speculation that China will combat the threat of inflation—and quash demand for oil—by raising interest rates to rein in lending activity.
Front-month crude oil traded within a range from $84.52 to $87.85 Friday.
The fears about potential Chinese interest rate activity also prompted a natural gas selloff. Natural gas for December delivery plunged 3.3 percent to end the day at $3.80 per thousand cubic feet. Natural gas, which had settled at $4.09 Monday, is down 7.1 percent for the week.
On Friday, natural gas peaked at $3.94 and bottomed out at $3.81.
December gasoline fell three cents Friday to settle at $2.21 per gallon. It traded from $2.19 to $2.26. For the week, gasoline is up 1.4 percent.