Commodity Corner: Crude Down, Fear on the Rise
Oil prices plunged for the third straight day Thursday as bearish global economic news reinforced worries about a decreasing demand for energy products.
Light, sweet crude settled at a one-month low of $75.74 a barrel, down $2.28 after trading between $76.05 and $77.97. September futures declined on news that the U.S. Labor Department reported an increase of 2,000 first-time jobless claims compared to last week's 482,000. In fact, initial unemployment claims reached their highest level in nearly six months.
Additionally, signs of slower economic growth in the U.S., China, and the U.K. contributed to the decrease in oil futures. The stronger dollar index -- against the euro and other major currencies -- pressured oil. A stronger dollar makes oil more expensive for buyers using other currencies.
The front-month natural gas price declined by three-cents to settle at $4.30 per thousand cubic feet Thursday. Influencing the decrease were weekly data from the Department of Energy showing an increase in stockpiles to 2,985 billion cubic feet (Bcf) as of August 6. Inventories remained nearly 8 percent above the 5-year average. Analysts do not anticipate natural gas prices to strengthen much in the near future.
The intraday range for natural gas was $4.26 to $4.36 Thursday.
September gasoline prices also ended the day lower, settling at $1.95 per gallon Thursday. Gasoline peaked at $1.96 and bottomed out at $2.00.