Commodity Corner: Oil Declines on Supply, Moratorium, Housing News

The price of a barrel of crude oil settled $1.50 lower Wednesday after the federal government reported a higher-than-expected supply of the commodity.

August oil futures ended the day at $76.35, compared to $77.85 Tuesday, after the U.S. Department of Energy's Energy Information Administration announced the country's crude stockpile rose 0.6% last week to 365.1 million barrels. Traders had been anticipating a decline.

Also placing downward pressure on oil was a federal judge's decision Tuesday to lift the Obama Administration's moratorium on deepwater drilling in the Gulf of Mexico. In addition, a U.S. Commerce Department report finding that sales of new homes fell by one-third in May. Oil hit a high of $77.83 and a low of $75.17 during Wednesday's trading.

The threat of a tropical storm forming in the Caribbean and ultimately reaching the U.S. Gulf Coast bumped up July natural gas futures four cents Wednesday to settle at $4.80 per thousand cubic feet. Although forecasts differ at this point on the projected intensity and track of the storm, the prospect of a tropical system affecting a major source of U.S. gas production overcame reports of abundant natural gas supplies. Gas traded from $4.75 to $4.88 Wednesday.

The price of a gallon of gasoline for July delivery settled five cents lower to $2.08. The intraday range for gasoline was $2.07 to $2.13.