Commodity Corner: Crude Begins the Week Down
Light sweet crude oil for October delivery settled lower Monday.
The price of a barrel of oil on the front-month contract ended the day at $73.10, a 36-cent decline from Friday's settlement. Oil's recent position between $70 and $80 stems from fears that any economic recovery in developed countries is diminishing and that supplies continue to be abundant, the London-based Centre for Global Energy Studies (CGES) noted Monday in its MOR Monthly Oil Report.
According to CGES, Saudi Arabia and China should continue to take steps to keep prices within this range. In the case of the former, CGES stated, the world's top oil producer can tighten its output as needed to prevent prices from falling below $70. China's refiners, meanwhile, reportedly tend to lose interest in crude purchases when the price exceeds the $80 mark. "At present, there seems little to force oil prices out of this range," CGES observed.
Oil traded from $72.75 to $74.48 Monday.
Weather news placed downward pressure on the September natural gas futures contract price, which settled a $4.07 per thousand cubic feet. Monday's five-cent decline followed a National Hurricane Center projection that Tropical Storm Danielle would steer clear of the Gulf of Mexico and its extensive offshore energy infrastructure.
Natural gas futures fluctuated from $4.03 to $4.13.
The price of a gallon of gasoline for September delivery tracked downward Monday, losing a nickel to settle at $1.88. The intraday range for gasoline was $1.88 to $1.94.