Commodity Corner: Oil Edges Downward
June crude oil fell slightly Tuesday as investors anticipated the outcome of the Federal Open Market Committee (FOMC) meeting, which concludes Wednesday.
Oil lost seven cents to end the day at $112.21 a barrel as the FOMC began its regular two-day meeting to decide on the Federal Reserve's monetary policy. Fed Chairman Ben Bernanke is expected to provide clues about any changes to existing policy Wednesday. The Fed's latest policy course has been to keep interest rates very low in an attempt to stimulate the economy. The policy has had the effect of weakening the U.S. dollar, which in turn has been bullish for oil.
Crude oil peaked at $112.64 and bottomed out at $111.12 Tuesday.
Gasoline for May delivery gained four cents Tuesday after a late-Monday power outage resulted in the temporary shut down of three Texas City, Texas, refineries. The BP, Valero, and Marathon refineries together can process 796,000 barrels of oil per day.
Gasoline futures settled at $3.36 a barrel Tuesday. U.S. gasoline inventories have trended downward over the past two months, prompting investors to pay particularly close attention to the Gulf Coast outages.
May gasoline traded within a range from $3.30 to $3.37 Tuesday.
Front-month natural gas ultimately remained flat at $4.39 per thousand cubic feet Tuesday after fluctuating from $4.34 to $4.41.