Oil Prices Drop
Source: Associated Press, Sandy Shore (8/31/10)
"Oil continues to spend much of its time trailing the stock market."
Benchmark crude for October delivery lost $2.13 at $72.57 a barrel in afternoon trading on the NYMEX.
The national average for a gallon of unleaded regular gasoline Tuesday was $2.677, according to AAA, Wright Express and Oil Price Information Service. The Conference Board said its Consumer Confidence Index now stands at 53.5, up from 51.0 in July. Still, consumer confidence is far below the 90 reading that would indicate a healthy economy.
The S&P/Case-Shiller 20-city home price index rose 1% in June from May and 4.2% from a year ago. However, home prices are expected to fall for the rest of the year.
Stocks got a little boost from the economic news. The DJIA was up about 15 points in early afternoon. The NASDAQ and the S&P500 were little changed. Traders have kept an eye on stocks for signs about the direction of the economic recovery.
"Oil continues to spend much of its time trailing the stock market," analysts at Ritterbusch and Associates said.
Many traders are awaiting Augusts' unemployment data, due Friday, to get a better handle on the economy.
"Every bit of news will bump the market in one or the other direction," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.
Energy prices also pulled back after Hurricane Earl turned toward the East Coast of the U.S. and away from oil and gas operations in the Gulf of Mexico. Big storms rolling through the Gulf can interrupt production and raise prices.
"Some of that premium is being taken out of the market," Lind-Waldock senior market analyst Rich Ilczyszyn said.