Crude suffers its first weekly loss in a month
Crude oil prices ended lower on Friday, 15 May, 2009. With Friday's losses, crude suffered its first weekly loss in a month's time. Prices ended lower as traders remained a bit pessimist about hopes of quick global recovery from the current recession. International Energy Agency reducing its crude demand forecast in the latest monthly report and the movement of dollar also affected the crude prices.
On Friday, crude-oil futures for light sweet crude for June delivery closed at $56.34/barrel (lower by $2.28 or 3.9%) on the New York Mercantile Exchange. For the week, crude ended lower by 3.9%.
Crude ended April higher by 2.9%. Previously, March trading ended 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 61% since then. Year to date, in 2009, crude prices are higher by 20%. On a yearly basis, crude prices are lower by 42%.
Earlier during the week, the International Energy Agency reported on Thursday that it now expects demand to fall 2.6 million barrels a day from 2008 levels. This is 200,000 barrels more than the IEA had projected a month ago.
In the currency market on Friday, the greenback tumbled against the yen but gained against the euro. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended higher by 0.6%.
Among economic reports for the day, the Labor Department reported on Friday, 15 May, 2009, that falling energy prices offset another big jump in cigarette prices in April, leaving the U.S. consumer price index flat for the month. With energy prices down 20% since April 2008, the CPI has fallen 0.7% in the past 12 months, the largest decline since 1955.
The IEA had reported on Wednesday, 13 May, that U.S. crude inventories excluding those in the Strategic Petroleum Reserve decreased by 4.7 million barrels in the week ended 8 May, 2009. Market was expecting a gain of more than 1 million barrels. The drop in the inventories level was helped by weak imports. Oil imports averaged 8.7 million barrels per day last week, down 1.2 million barrels per day from the previous week.
IEA also reported that demand still remained weak. Total petroleum demand over the past four weeks averaged 18.2 million barrels a day, down by 7.9% from a year ago. In individual petroleum products, gasoline demand fell 1.2% from a year ago, distillate fuel, which include diesel and heating oil, dropped 14.1%, while jet fuel consumption declined 10.3%.
Also at the Nymex on Friday, June-reformulated gasoline skidded 4.31 cents, or 2.5%, to $1.6806 a gallon, and June heating oil lost 7.59 cents, or 5.1% to $1.4188 a gallon
Natural gas for June delivery also dropped, giving up 19.4 cents, or 4.5%, to $4.098 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed at Rs 2,828/barrel, lower by Rs 25 (0.87%) against previous day's close. Natural gas for May delivery closed at Rs 203.5/mmbtu, lower by Rs 1.7/mmbtu (0.82%).
