Oil prices and related exchange traded funds (ETFs) slid as crude oil falls below the three-digit mark. However, higher consumption of electricity pushed natural gas prices higher.
Benchmark West Texas Intermediate for July delivery dipped below $100 a barrel during trading, reports Chris Kahn for the Associated Press. Government and industry reports show that U.S. consumers are limiting their oil consumption due to the high fuel costs. Total demand for petroleum products declined 5% and gasoline demand diminished 0.5% year-over-year. [At the Pump with the Gasoline ETF.]
- U.S. Oil Fund (NYSEArca: USO) is currently down 0.1%.
- US Commodity Gasoline Fund (NYSEArca: UGA) is down 0.9%.
The Energy Information Administration stated that petroleum inventories unexpectedly increased by an additional 2.9 million barrels – analysts had expected a drop by an average of 1.9 million barrels. Additionally, gasoline supplies also jumped by 2.6 million barrels, or more than double what was expected.
Natural gas inventories, though, increased by a less-than-expected 2.1 trillion cubic feet. Natural gas futures were up to their highest levels in four months, jumping more than 3%. With warmer weather systems across much of the eastern half of the U.S., high power consumption is expected to continue.
- U.S. Natural Gas Fund (NYSEArca: UNG) is up 3.2%.
For more information on oil or natural gas, visit our energy category.
Full disclosure: Tom Lydon’s clients own UNG.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.