Commodity Corner: Oil Approaches $108
The price of light sweet crude on the NYMEX settled at its highest level in 2½ years Friday, with oil for May delivery ending the day at $107.94.
Friday's milestone followed positive news on the U.S. unemployment front. Earlier in the day, the U.S. Department of Labor announced that nonfarm payroll employment increased by 216,000 in March—higher than analysts' expectations. "(T)he unemployment rate decreased to 8.8 percent" during the same period, noted Labor Secretary Hilda L. Solis in a written statement. Solis added that the unemployment statistic has fallen by a full percentage point over the past four months.
Also benefiting oil was a stronger euro relative to the U.S. dollar; the greenback fell 0.5 percent against the euro. Crude oil, priced in dollars, becomes a better value for investors holding other currencies when the dollar weakens.
Oil traded within a range from $106.30 to $107.93 Friday. Compared to Monday's settlement price, oil is up 3.8 percent for the week.
Could springlike weather be on the horizon for the Northeast? Although the heating-dependent region dealt with unusually cold temperatures throughout the month of March, weather forecast models indicate that warmer air should envelop New England for at least the early part of next week. The outlook for milder conditions resulted in a three-cent drop for May natural gas, which settled at $4.36 per thousand cubic feet.<,p> The May natural gas contract peaked at $4.43 and bottomed out at $4.29 Friday. It is down two percent for the week.
Front-month gasoline ended the day at $3.15 a gallon, marking a four-cent day-on-day gain. The May contract fluctuated from $3.098 to $3.15, and it is up four percent for the week.