Commodity Corner: Crude Oil Nears $77
The front-month crude oil contract rose by 2.4% Tuesday, buoyed by a stronger euro exchange rate against the greenback.
July oil futures settled at $76.94 per barrel, up $1.82 from Monday. Despite serious debt crises in Greece and other southern European countries, recent predictions of improving industrial output elsewhere in Europe have bolstered the region's economic outlook and the value of the EU's currency. Because the price of oil is denominated in U.S. Dollars, a stronger euro improves the commodity's attractiveness to investors. The euro rose to $1.23 Tuesday, 3.8% higher than the currency's value last Monday. Also generating the bullish sentiment for oil were expectations of lower U.S. oil stockpiles and overall global economic growth. Oil traded from $74.62 to $76.78 Tuesday.
Natural gas futures also rallied Tuesday, settling 18 cents higher to $5.19 per thousand cubic feet. Thanks to predictions of an active Atlantic hurricane season and strong demand for electricity to counter above-average summer heat, natural gas prices have been on an upswing despite ample supplies of the fuel. Gas prices fluctuated between $5.02 and $5.17 during Tuesday's trading.
The price of a gallon of gasoline settled six cents higher Tuesday, ending the day at $2.12. The intraday range for gasoline was $2.06 to $2.12.