Current Oil Price Drops

The current oil price dropped as traders obtained profits after the latest increases in prices and with a report showing a weaker than anticipated manufacturing activity in the United States.

On the New York Mercantile Exchange, light, sweet, crude for delivery in May moved 36 cents lower to a crude price per barrel of $96.87 during midday trading, Bangkok time. The contract moved 65 cents higher to settle at $97.23 per barrel during the last trading day of the past week. Trading was closed earlier last week for a holiday.

Oil increased over $4 in the latest trading sessions, pushed by indications of a stronger economy in the United States. The increase for the month of March was 5.6 percent. Higher per barrel oil prices encourage investors to take in gains.

Oil prices also moved lower following a report of an industry group that shows a slowdown in the manufacturing activity of the United State for the month of March. The manufacturing index of the Institute for Supply Management declined from February’s 54.2 to 51.3 in March. The index signifies a sector’s expansion if it is higher than 50.

The price of oil in today’s trading declined mainly because of profit taking. Prices increased in the past week because of a boosted performance by equities trading as well as a weaker U.S. currency, according to energy analyst Victor Shum of Singapore’s Purvin & Gertz.

In other NYMEX trading, wholesale gasoline moved 0.4 cent lower to a price of $3.106 per gallon. The cost of heating oil also shed 0.7 cent to $3.04 per gallon. The price of natural gas moved 3.4 cents down to $3.99 per thousand cubic feet.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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