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.
The retail price on diesel has increased 80.1 cents higher per gallon. Its price will keep on rising because of the existing market scenario. According to, Wright Express and Oil Price Information Service, gasoline prices fell less than a penny to a national average of $3.432 per gallon. The price of gasoline is soaring at $4 per gallon. However, a gallon of regular oil is available at reasonable rate.
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.