Commodity Corner: Oil Soars Past $91
Expectations of a brighter U.S. economy helped crude futures soar past $91 a barrel Thursday. Light, sweet crude gained $1.03 Thursday to settle at $91.51 a barrel on the New York Mercantile Exchange. The intraday range for oil was $90.33 to $91.63.
According to the U.S. Department of Labor, seasonally adjusted initial claims fell to 420,000 for the week ended Dec. 18—dropping by 3,000. Meanwhile, the U.S. Department of Commerce reported an increase in consumer spending for the month of November. Analysts predict that a better economy means an increase in demand for oil and gas.
Higher oil prices were also encouraged by expectations for a stronger global demand. The 12-members of Organization of Petroleum Exporting Countries (OPEC) are to attend a Dec. 25 meeting at which OPEC will decide whether or not to increase production quotas for the upcoming year. The decision will be made on market conditions.
Thursday's trading session closed an hour earlier at 1:30 p.m. in observance of the Christmas holiday. There will be no trading on Friday, Dec. 24.
RBOB gasoline for January also increased Thursday, adding nearly two cents to settle at $2.44 a gallon. Analysts predict the increase to be caused by the crude rally. Front-month gasoline traded Thursday between $2.42 and $2.45.
Meanwhile, natural gas settled at $4.088 per thousand cubic feet—almost an 11 percent drop in the last two weeks. Although temperatures in the U.S. remain below-average, the surplus in supplies has caused prices to stay comparably low. Natural gas prices fluctuated Thursday between $4.05 and $4.17.