Commodity Corner: Oil Approaches $78
Unfavorable economic news from the U.S. and China contributed to a sharp decline Wednesday in the September futures price for a barrel of crude oil.
Oil settled at $78.03, a $2.23 decline from Tuesday, after China's National Bureau of Statistics reported that the country's level of industrial production decreased to 13.4% in July a 0.3-percentage point decrease from the previous month. In the U.S., the Department of Energy reported that crude oil stockpiles were down by 3 million barrels last week; however, the 355-million-barrel figure for the week ending August 6 was 0.9% higher compared to the corresponding period in 2009. Also weakening oil prices was a stronger greenback against the euro.
Oil prices fluctuated from $77.90 to $80.44 during Wednesday's trading.
The natural gas price for September delivery settled at $4.33 per thousand cubic feet, a three-cent increase from the previous day. Traders expected no major impact to energy infrastructure from a tropical depression that was headed toward the Central Gulf Coast. In fact, the National Hurricane Center was reporting at 4 p.m. Central time that the system had dissipated. Natural gas traded from $4.26 to $4.38 during the day's session.
The price of a gallon of gasoline fell nine cents to settle at $2.00. The intraday range for gasoline was $1.99 to $2.09.