Commodity Corner: Oil Plummets on Stronger Dollar
Crude oil for July delivery plunged Wednesday as fears of an escalating debt crisis in Greece contributed to a stronger dollar.
Oil lost $4.56 to settle at $94.81 after the dollar index, a gauge of the greenback's value against other major currencies, increased by 1.5 percent Wednesday. The euro lost 2.1 percent against the dollar, weighed down by Greek government officials' scrambling to gain support for austerity measures. The government must agree to such measures to address the country's debt crisis in order to qualify for a bailout from the European Union and International Monetary Fund.
Providing a softer landing for oil was a U.S. Energy Information Administration report showing a larger-than-expected decline in crude oil stocks last week. According to the EIA, total oil inventories decreased by 3.4 million barrels to 365.6 million barrels as of June 10. Analysts surveyed by Platts, meanwhile, had projected a 1.9 million-barrel draw.
Front-month crude traded within a range from $94.01 to $99.95 Wednesday.
July natural gas remained flat during midweek trading, ending the day at $4.58 per thousand cubic feet. Milder-than-normal temperatures throughout the Upper Midwest and Northeast are curbing demand for natural gas to generate electricity for cooling in these regions.
Natural gas peaked at $4.605 and bottomed out at $4.52 Wednesday.
The gasoline futures price lost 15 cents to settle at $2.92 a gallon. During Wednesday's session, July gasoline fluctuated from $2.91 to $3.07.