Commodity Corner: Oil, Natural Gas Settle Higher
Crude oil finished the first trading day of 2011 higher on signs that the U.S. economy will stay in a recovery mode this year.
February oil settled at $91.55 a barrel Monday, a 17-cent improvement from Friday, after hitting a two-year high of $92.58. The positive sentiment stems from an Institute for Supply Management (ISM) report that economic activity in the U.S. manufacturing expanded for the 17th consecutive month in December. Moreover, ISM concluded that the overall economy grew for the 20th straight month during the period.
ISM stated that its Purchasing Managers Index (PMI), a key gauge of the direction of the U.S. economy, rose to 57 last month— a 0.4-percentage point gain from November. The organization of supply executives also observed strong gains in the rate of growth in new orders and production, along with slower growth in employment and inventories. In addition, prices grew at a faster rate last month while order backlogs contracted for the fourth consecutive month.
February crude bottomed out at $91.38 Monday.
Natural gas for February delivery, meanwhile, surged nearly six percent Monday on forecasts of colder-than-normal temperatures throughout much of the U.S. next week. Front-month gas gained nearly 25 cents to settle at $4.65 per thousand cubic feet. It traded within a range from $4.49 to $4.69.
Feburary gasoline remained flat at $2.43 a gallon. It fluctuated from $2.42 to $2.47.