Commodity Corner: Crude Down, Dollar Up
Crude futures retreated 32 cents Thursday, as the euro plummeted to its lowest level against the U.S. dollar since November.
The greenback gained 1.5 percent after European Central Bank's President Jean-Claude Trichet announced that the institution has no immediate plans of increasing interest rates. A stronger dollar curbs the appeal of commodities, making it more expensive for foreign buyers. A decrease in new unemployment insurance claims, reported by the U.S. Department of Labor, also helped strengthen the dollar.
Meanwhile, the political turmoil in Egypt worsened as clashes became more violent between supporters of the government and those protesting against it. Investors continue to fear that the violence may spread across the Middle East and North Africa, causing a disruption in oil supplies. Combined, the Middle East and North Africa produce more than a one-third of the world's oil. The International Energy Agency (IEA), however, maintains that crude prices will decrease due because the Organization of Petroleum Exporting Countries (OPEC) can boost supply by using spare capacity.
Light, sweet crude for March delivery settled at $90.54 a barrel Thursday after fluctuating between $90.00 and $92.05 a barrel.
Front-month natural gas futures fell 2.1 percent Thursday, settling at $4.34 per thousand cubic feet. The U.S. Energy Information Administration (EIA) reported a decrease of 189 billion cubic feet last week, but the decline fell short of analysts' expectations. In spite of the cold weather, traders continue to perceive an ample supply of inventories. For the week ended Jan. 28, natural gas in U.S. storage was 2.353 trillion cubic feet, or 0.2 percent above the five-year average, according to the EIA.
The intraday range for natural gas was $4.325 to $4.496.
Gasoline futures for March gained half a cent, ending Thursday's trading session at $2.50 a gallon. Gasoline prices peaked at $2.53 and bottomed out at $2.49 Thursday.