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Friday, April 24, 2009

Crude ends higher for third straight day

Weak dollar and good earnings take crude higher

Crude oil ended higher once again on Thursday, 23 April, 2009. Prices rose today due to the weak dollar and a batch of strong earning reports.

On Thursday, crude-oil futures for light sweet crude for June delivery closed at $49.62/barrel (higher by $0.77 or 1.63%) on the New York Mercantile Exchange. Last week, crude ended lower by 3.7%.

Crude ended March trading up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 68.8% since then. Year to date, in 2009, crude prices are higher by 8.4%. On a yearly basis, crude prices are lower by 53%.

The dollar index, which measures the strength of the dollar against a basket of six other currencies fell 0.7%.

Earning reports dominated today. Apple, eBay, ConocoPhillips - all exceeded Wall Street's expectations.

EIA reported yesterday that crude inventories increased 3.7 million barrels (against an expected 3 million barrels) to 370.6 million barrels last week for the week ended 17 April, 2009, the highest level since September 1990. U.S. refineries operated at 83.4% of their operable capacity last week, higher than a week ago but still in a low range.

EIA had also reported that gasoline inventories rose 800,000 barrels and distillate stockpiles, which include heating oil and diesel, rose 2.7 million barrels. Market had expected a decline in both gasoline and distillate inventories. Total demand for petroleum products in the past four weeks fell 6.5% from a year ago. Among them, gasoline demand fell 0.4% while distillate consumption slumped 9.4%.

Also at the Nymex on Thursday, May reformulated gasoline slightly to end at $1.4015 a gallon and May heating oil lost 1.2 cent, or 0.9%, to $1.3179 a gallon.

May natural-gas futures fell 12.3 cents, or 3.5%, to $3.409 per million British thermal units. EIA reported today that U.S. natural-gas inventories rose 46 billion cubic feet last week, in line with expectations. At 1,741 billion cubic feet, stocks were 459 billion cubic feet higher than last year at this time and 322 billion cubic feet above the five-year average.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for May delivery closed at Rs 2,472/barrel, higher by Rs 27 (2.1%) against previous day's close. Natural gas for April delivery closed at Rs 177.1/mmbtu, lower by Rs 6.8/mmbtu (3.7%).

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