According
to the investors, the high-ceilinged oil price has come up with positive news
for the U.S. economy. The price rose because of the fact that the private
sector added almost 111,000 jobs in October 2011. The Automatic Data Processing
reported that the service industries got plenty of benefits.
As a
result of soaring oil prices, Benchmark crude rose by 32 cents to end the day
at $92.51 per barrel in New York, while Brent crude lost 20 cents to finish at
$109.34 a barrel in London. After a two-day meeting of the Federal Reserve,
which doesn’t announce any new policy, the prices on oil may slip a little bit.
The
studies depicted that the decision taken by the Fed has a greater impact on oil
prices. Last year the Fed decision supported the prices of oil as well drained
$600 billion into a bond-buying program. Hence, such things influenced the
currency and commodity markets. As a result of alteration in oil price,
Benchmark crude mounted 20% higher in 2010.
Despite the fact that consumers are ready to spend more, it
is a very difficult task to manage downside risk. Hence, the economy is losing
its importance on the commodity market. If the economy stays standstill, then
the central bank assures to take a leap step.
As mentioned by the Energy Information Administration, the
prices on U.S. oil and gasoline climbed up in the last week in October 2011
because of less demand for oil. Another point to note down here is that the
demand for distillate supplies that include diesel and heating oil dropped
enormously. However, the demand for distillate supplies, especially in foreign
countries resulted to increase in export.
The demand for diesel is escalating because farmers require
the fuel for harvesting. In North America and U.S. industries, many energy
companies are expanding oil and natural gas drilling operations.
According to the energy trading, the heating oil
lost 3.72 cents to end at $3.0007 per gallon. Gasoline futures finished at
$2.6272 per gallon. Natural gas lost 3.2 cents to end at $3.749 per 1,000 cubic
feet.
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