Commodity Corner: Oil, Natural Gas Settle Higher
For the third consecutive trading day, crude oil for January delivery settled at a two-year high.
Oil settled at $89.38 a barrel Monday, a 19-cent gain from Friday. Helping to propel the benchmark WTI price upward was speculation that the U.S. Department of Energy will on Wednesday report that the country's oil stocks declined last week. In addition, comments by Federal Reserve Chairman Ben Bernanke airing on Sunday's episode of the CBS television program "60 Minutes" helped to boost commodity and debt markets.
In an interview, Bernanke suggested that additional stimulus spending by the central bank—a "Quantitative Easing 3"—could be in the offing. Because such monetary measures have the effect of weakening the greenback, crude oil would become a better value for buyers holding other currencies.
The dollar strengthened against the euro Monday, gaining nearly 0.5%. January crude traded within a range from $88.56 to $89.76.
Forecasts of a massive snowstorm this weekend extending from the Dakotas to the Northeast helped natural gas surge past $4.50 on Monday. After trading from $4.33 to $4.52, January natural gas settled at $4.49 per thousand cubic feet. Monday's settlement price is more than three percent higher than that of the previous session.
Cold temperatures are expected to continue through much of the U.S., with subsequent snowstorms predicted later this month. In fact, noted AccuWeather meteorologist Joe Bastardi forecasts that more than 50 percent of the U.S. will experience a white Christmas this year—well above the norm. According to AccuWeather, less than one-quarter of the country typically sees snow on the ground on December 25.
Front-month gasoline lost a penny Monday to settle at $2.34 a gallon. The price of January gasoline fluctuated from $2.33 to $2.37.