Oil Update March 31, 2011
Crude Oil Price: $106.72 at 2:37 PM
Crude futures soared to their highest in two and a half years amid new concerns of Libyan turmoil and a weaker dollar.
Light, sweet crude advanced $2.45 Thursday ending the quarter at $106.72 a barrel. Prices surged on news of Muammar Gadhafi’s troops retaking control of oil port Ras Lanuf and shelling rebels nearby at Brega, another rebel stronghold. Analysts claim optimism from earlier this week has been replaced by concern of prolonged production cuts.
On Thursday, the dollar decreased against the euro on expectations that the European Central Bank will increase interest rates next week. A weaker dollar makes commodities cheaper for foreign buyers and boosts oil prices.
The intraday range for oil was $104.12 to $106.83 Thursday.
Gasoline for April delivery also rose to its highest in more than two years. Gasoline futures fluctuated between $3.065 and $3.13, before ending the trading session at $3.11 a gallon. The April contract for gasoline expired at Thursday’s close.
Likewise, natural gas prices gained 1.2 percent Thursday, ending the last trading session for the quarter higher. Front-month natural gas gained nearly five cents to settle at $4.41 per thousand cubic feet Thursday.
The Energy Information Administration (EIA) reported an increase of 12 billion cubic feet in reserves from the previous week. Stockpiles for the week ended March 25 were 1.624 trillion cubic feet, 4.4 percent above the five-year average.
Analysts claim shale plays have altered available domestic supply, which have boosted weekly injections. According to the EIA, the U.S. has 827 trillion cubic feet of natural gas in shale formations.
Despite reports of above-average stockpiles, natural gas peaked at $4.44 before bottoming out at $4.21 Thursday.