Current Oil Prices Reverse its Three-Day Fall

Current oil prices posted a gain of almost $2 a barrel after dropping for three consecutive days.

Positive news on the job market of the United States, indications that Spain can hit its targets to cut deficits and hopes that China’s central bank will soon act to aid its economy all contributed to the largest two-month gain in the oil price per barrel seen so far this year.

In the NYMEX, the current oil price grew 2.1 percent, or $1.87, to end at $91.85 a barrel. The last time prices gained this much was on August 3.

According to the Labor Department, the number of Americans receiving unemployment benefits fell by 26,000 in the past week to a seasonally adjusted total of 359,000. That is the lowest rate in a nine-week period. Any indication of an economic improvement in the United States can push fuel prices higher.

The increases in the oil price per barrel was earlier seen in Asia, supported by expectations that the People’s Bank of China will soon exert more effort to boost the second biggest economy in the world. After which, Spain made an announcement of strict budget reductions aimed at convincing the world that it is capable of meeting its deficit-reduction goals.

Moreover, the stock markets of the United States experienced their best day this week. Prior to the recent drop, the price of oil lost $9 a barrel in the past two weeks after the U.S. Federal Reserve announced fresh stimulus measures.

Meanwhile, current gasoline prices shed a cent to $3.795 per gallon, said the Wright Express, OPIS and AAA. That is lower by almost 4 cents compared to last month.

The cost of Brent North Sea oil rose $1.97 to end at $112.01 in London’s ICE Futures Exchange.

Elsewhere in the energy markets, the price of heating oil moved higher by 5.1 cents to finish at $3.157 a gallon. The rate of wholesale gasoline increased 6.3 cents to end at $3.14 a gallon. The cost of natural gas rose 8.2 cents to settle at its highest level for the year at $3.297 per thousand cubic feet.

By: Chris Termeer