Commodity Corner: Oil Settles Lower on Demand Concerns
Crude oil for July delivery ended the day at $99.01 a barrel Monday.
Monday's $1.21 day-on-day decline stems from pessimism about the prospects for crude oil demand, thanks in part to recent unimpressive economic data showing higher unemployment in the U.S. In addition, some analysts expect OPEC to raise its production ceiling when the cartel meets later this week.
Oil peaked at $100.68 and bottomed out at $98.64 Monday.
The futures price for natural gas moved in the opposite direction Monday, gaining 12 cents to settle at $4.83 per thousand cubic feet. Providing some of the momentum for gas was an International Energy Agency (IEA) report that projects a "golden age" for the fossil fuel. According to the IEA, natural gas use worldwide could exceed 2010 levels by more than 50 percent by the year 2035.
In the nearer term, more summerlike temperatures are expected to prevail in the Northeast and Midwest through this week. As a result, demand for cooling—and natural gas—is expected to increase in these key electricity markets.
July natural gas traded within a range from $4.74 to $4.855 Monday.
July gasoline slipped four cents to end the day at $2.95 a gallon. It fluctuated from $2.94 to $3.02.