Oil Dips Slightly, Stays Steady
Oil fell slightly on the New York Mercantile Exchange today on a stronger US dollar. After a month-long rally seeing crude prices top $70 during trading last Friday, oil prices seem to be steadying.
Crude oil settled at $68.09 after a minor decrease of 35 cents. On the London ICE, Brent crude fell 46 cents to $67.88.
Discouraging investments in oil used as hedges against inflation, the dollar gained strength against other currencies today, closing at $1.3891 per euro.
Gas continued its fall, reaching $3.73 after a drop of 14 cents. So far in 2009, the price of natural gas has fallen 31%.
Despite this, Bloomberg analysts foretold an increase in both oil and gas prices by the end of the year. The financial powerhouse sees oil rising 22% and gas climbing 38% by the second half of 2009.
On the other hand, energy-focused financial services firm Pritchard Capital Partners sees a more bearish environment than others.
"We are forecasting $5 gas by year-end," Pritchard Capital Partners research analyst Brian Uhlmer said. "For 2010, we don't expect a major spike."
Uhlmer added that gas production has reached a plateau, demand will remain weak and that the firm is not forecasting a major surge in LNG.
"Declines will begin to be evident by October, which will support a $5 gas price," the analyst continued.
As for oil, Uhlmer said the firm expects a $50 average for 2009, and a $65 average for 2010.
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