Commodity Corner: WTI, Brent Endure Bearish Monday
Both the WTI and Brent contracts settled lower Monday as the dollar strengthened against the euro. When the dollar gains value against the euro and other major currencies, crude oil becomes a less attractive buy for investors holding currencies other than the greenback.
Light sweet crude oil for November delivery lost $2.26 to end the day at $85.70 per barrel. The Brent futures price fell $3.08 to settle at $109.14 per barrel. The euro lost value against the dollar after euro-zone central bankers failed to strike a deal to resolve Greece's debt crisis during a weekend meeting in Poland. Late in the day, however, Greek officials signaled that bailout talks were showing signs of progress.
Adding to the bearish mood for oil Monday was a dim view of economic growth prospects for the U.S. Specifically, the latest builder confidence numbers from the National Association of Home Builders (NAHB) and Wells Fargo show virtually no improvement. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market," NAHB Chief Economist David Crowe said in a written statement.
The WTI traded within a range from $84.79 to $87.75 while the Brent fluctuated from $108.79 to $112.00.
October natural gas gained two cents to end the day at $3.83 per thousand cubic feet after traders partook in some bargain hunting. Taking advantage of falling prices, which bottomed out at $3.74, investors seized upon a buying opportunity that resulted in a rally. Monday's $3.83 settlement price was also the intraday high.
Front-month gasoline lost eight cents to settle at $2.70. The October contract price peaked at $2.78 and bottomed out just below $2.69.