Crude Oil witnesses Correction on Weaker Greenback

Crude oil futures declined on Friday in reaction to weaker US dollar and bearish closing at Wall Street.  Crude oil futures contract for September delivery fell 0.2 percent or $0.12 to settle at $82.26 per barrel on New York Mercantile Exchange. The respective contract reached the day’s low of $79.17 per barrel while plunged 3.7 percent for the week.

Steven Schork from The Schork Group in Philadelphia commented, “In the absence of macroeconomic headlines Friday, oil took its cues from a lower dollar and another record for gold”, he further added, “Prices may have reached their lowest for the time being if we haven’t hit that already,”

The selling pressure in crude oil was also seen due to disappointing factory orders data in Philadelphia. Analysts from Goldman Sachs think that Philadelphia’s Federal Reserve survey results raise the risk of recession. However, in a note to their client analysts form Goldman Sachs said, “U.S. oil demand over the past three weeks has risen to the highest levels for this time of year since before the financial crisis, and the oil market supply-demand balance remains firm, despite being more than halfway through the 30-million-barrel (strategic reserves) release.”

Among other commodities, natural gas futures contract for September delivery gained 1.2 percent or $0.05 to settle at $3.94 per million British thermal units. The respective contract was down 3 percent for the current week.

Gasoline futures contract for September delivery surged 2.1 percent or $0.06 to $2.84 per gallon whereas for the week gasoline declined by 0.7 percent. Heating oil futures contract for September delivery jumped 1 percent or $0.03 to $2.90 per gallon and for the week remained unchanged.


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