Commodity Corner: Crude Rallies Along with Equities
Light sweet crude oil for September delivery gained $2.50 Monday to settle at $87.88 a barrel.
Rallies in equities markets worldwide, coupled with a weaker dollar, propelled oil futures forward. Major merger announcements Monday by heavyweights such as Google and Transocean helped the Dow Jones Industrial Average and S&P 500 to finish the day 1.9 percent and 2.18 percent higher, respectively.
The U.S. Dollar, meanwhile, weakened against other major currencies after a monthly Federal Reserve Bank of New York report showed worsening business conditions in the Empire State. A weaker greenback makes dollar-denominated crude oil a better buy for investors holding other currencies. The New York Fed's survey revealed falling orders, decreasing prices, plunging capital expenditures, and a future general business conditions index hitting its lowest point since February 2009.
The WTI peaked at $88.05 and bottomed out at $84.40. Brent futures settled at $109.91 a barrel, a $1.88 day-on-day gain and four cents shy of Monday's intraday high. The September Brent contract fell to $108.20 earlier in the session.
Thanks in part to milder temperatures in much of the U.S., August natural gas futures lost four cents to settle at $4.02 per thousand cubic feet. The front-month contract price fluctuated from $3.95 to $4.06.
The price of a gallon of reformulated gasoline gained a nickel to end the day at $2.87. August gasoline traded within a range from $2.81 to $2.88.