Crude erases all of prior week's loss
Crude oil prices ended substantially higher on Monday, 18 May, 2009 erasing all of prior week's losses. Prices rose today following an upbeat housing report and better than expected earning report from retailer Lowe's which boosted overall sentiments among traders. Prices also rose today as concerns increased that militant unrest in Nigeria may disrupt supplies from Africa's biggest oil producer.
On Monday, crude-oil futures for light sweet crude for June delivery closed at $59.04/barrel (higher by $2.69 or 4.8%) on the New York Mercantile Exchange. Last 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 59.8% since then. Year to date, in 2009, crude prices are higher by 24.8%. On a yearly basis, crude prices are lower by 45%.
The National Association of Home Builders reported today that encouraged by low interest rates and the re-emergence of first-time buyers, U.S. home builders' spirits improved again in May bringing its sentiment index to the highest level since the collapse of Lehman Brothers.
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago. At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May.
The report gave a strong boost to the US stocks and the Dow ended 235 points higher for the day.
Last 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. This perhaps kept further rise in crude prices from check.
Also at the Nymex on Monday, June-dated reformulated gasoline gained 7.75 cents, or 4.6%, to $1.7581 a gallon, and June heating oil rose 5.69 cents, or 4%, to $1.4757 a gallon.
Natural gas for June delivery also rose, up 4.1 cents, or 1%, to $4.139 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 2,856/barrel, higher by Rs 28 (0.99%) against previous day's close. Natural gas for May delivery closed at Rs 196.9/mmbtu, lower by Rs 6.6/mmbtu (3.2%).
