Oil rebounds alongside stocks to more than $68
NEW YORK -- Oil prices rebounded alongside the major stock indicides Tuesday after a huge sell-off that began the week.
Still, energy prices swung early in the day with so much uncertainty about the pace of an economic recovery.
The September benchmark crude contract gained $1.80 cents to $68.55 a barrel on the New York Mercantile Exchange. It fell 76 cents to settle at $66.75 on Monday, the second consecutive day of declines that dropped the price of crude by 5 percent.
With the September contract expiring on Thursday, most of the volume was in the October contract, which rose $1.67 to $70.48.
Prices still linger near monthly lows and natural gas prices fell for the ninth straight day. It has become increasingly difficult to ignore the levels of crude and natural gas being placed into storage.
Energy Department data shows that the amount of crude placed in storage has grown for four straight weeks and that trend is expected to continue.
Major industries are not making products in great numbers because consumers are still skittish. That lack of demand for the energy needed to produce goods has pushed natural gas prices to seven-year lows.
That could lower utility bills for millions of Americans, depending on state regulations and contracts signed by power providers.
Consumers are still staying away from stores, though some retailers did better than expected.
Retailers as wide-ranging as Home Depot and Saks Inc. reported quarterly losses on Tuesday, yet company shares rose with the U.S. market.
"Oil moved with the market's massive mood swing as it tried to determine just where we are in the economic recovery," said PFGBest Research analyst Phil Flynn.
There are so many mixed signals about the economy, it has been difficult to predict how much energy is going to be consumed not only in 2010, but even this year.
The Commerce Department reported Tuesday that construction of single-family homes rose 1.7 percent in July. It was the fifth straight monthly increase and the fastest pace since last October.
At the same time, construction of apartment buildings slumped by 13 percent during the same period.
The economic uncertainty has provided some benefits to U.S. consumers at the gas pump, where prices are about what they were four years ago at this time of the year.
The average price for a gallon (3.8 liters) of regular gasoline is $2.634, according to auto club AAA, Wright Express and Oil Price Information Service. That's about $1.11 more than at this time last year.
Meanwhile, all eyes will be on weather maps to see if the first hurricane of the year threatens oil installations in the Gulf of Mexico. Hurricane Bill was a Category 2 storm with winds of 100 mph (160 kph) and will likely be near Bermuda by the end of the week, the U.S. National Hurricane Center said.
In other Nymex trading, gasoline for September delivery rose 2.6 cents to $1.977 a gallon and heating oil gained 3.4 cents to $1.86. Natural gas for September delivery fell 1.4 cents to $3.149 per 1,000 cubic feet.
In London, Brent prices fell 8 cents to $70.46 a barrel on the ICE Futures exchange.