Commodity Corner: Falling Dollar, Govt Report Boost Oil
Crude oil for June delivery gained $1.07 Wednesday, buoyed by a weaker dollar and a U.S. Government report showing that Americans had more disposable income in March and spent more on fuel during that period.
Oil settled at $113.93 a gallon as the greenback fell against the Swiss Franc, the euro, and a host of other major currencies. Because oil is priced in dollars, the commodity becomes a more attractive buy for investors holding other currencies when the greenback loses value.
Also boosting oil was a U.S. Commerce Department report showing that personal income and real disposable income rose last month by 0.5 percent and 0.1 percent, respectively. The agency added that real personal consumption expenditures increased by 0.2 in March and at a 2.7-percent annual rate during the first quarter of this year.
Oil traded within a range from $112.25 to $114.00 Friday. For the week, it is up 1.5 percent.
Natural gas for June delivery surged 13 cents to end the day at $4.70 per thousand cubic feet. Gas futures increased amid predictions that U.S. inventories will decline further as demand rises for cooling during the warmer months. The U.S. Energy Department reported Thursday that the volume of working natural gas in storage rose by 31 billion cubic feet last week, lower than analysts' expectations and well below the 215 Bcf for the corresponding period in 2010. Analysts surveyed by Platts had predicted a more generous 37- to 41-Bcf build for the week.
June natural gas peaked at $4.705 and bottomed out at $4.555 Friday. Gas is up 6.6 percent for the week.
The gasoline futures price increased by three cents to settle at $3.46 a gallon. May gasoline fluctuated from $3.42 to $3.48 during Friday's session. It is up 4.5 percent for the week.