The current oil prices declined as hopes weakened for a fresh set of stimulus for the U.S. economy. In the NYMEX, crude lost 2%, or $1.72, to finish the trading day at $88.06 a barrel. In London, the crude price per barrel of Brent fell $1.28 to end at $104.92.
Traders have been speculating on the possibility and timing that the Federal Reserve will attempt to boost the economy. In the past week, hopes increased but then fell today after reports of stronger home values and consumer confidence.
According to the Conference Board, the consumer confidence in the United States rose in the month of July after a decline for four straight months. That is a truly promising indication because consumer spending influences a major part of the country’s economy. Moreover, the prospects of the housing industry seemed better with the rise in prices across the nation.
As long as there are positive signs in the economy, the Fed may postpone fresh stimulus measures that raised the crude price per barrel in the past years, said analyst Phil Flynn. He added that positive news is considered bad news for stimulus.
The Fed is considering potential stimulus measures during a current policy meeting.
At the pump the current gasoline price gained $0.014 to $3.50 a gallon (USA avg), said the OPIS, AAA and Wright Express. In July, prices of regular gas have increased by about $0.17 per gallon. However, the increased rates were still cheaper by $0.44 compared to its highest price seen in April.
Elsewhere in the energy markets, heating oil fell $0.0374 to close at $2.817 a gallon. Meanwhile, wholesale gas fell $0.0441 to $2.7743 a gallon. The price of natural gas lost less than a cent to end at $3.3090 per thousand cubic feet.
By: Chris Termeer