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Wednesday, June 24, 2009

Crude climbs up

Crude prices rise as crude inventories are expected to fall

Crude prices at Nymex once again crawled above the $69 mark on Tuesday, 23 June, 2009. Prices rose today as traders anticipated that tomorrow's inventory report will show drop in crude inventories for last week. The weak dollar also pushed up crude price.

On Tuesday, crude-oil futures for light sweet crude for July delivery closed at $69.24/barrel (higher by $1.74 or 2.6%). Last week, crude ended lower by 3.3%.

Crude had ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 53% since then. Year to date, in 2009, crude prices are higher by 38.2%.

Traders are anticipating that tomorrow's weekly inventory data to show that U.S. commercial crude stocks dropped 1.2 million barrels for the week ended 19 June.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell as much as 1.3%. Federal Reserve policy makers began a two-day meeting today. The central bank has held its benchmark interest rate near zero since December.

Also at the Nymex on Tuesday, July reformulated gasoline rose 3.35 cents, or 1.8%, to $1.8932 a gallon and July heating oil gained 4.15 cents, or 2.4%, to $1.769 a gallon.

July natural gas futures sank 5.4 cents, or 1.4%, to $3.879 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 July delivery closed at Rs 3,341/barrel, higher by Rs 52 (1.6%) against previous day's close. Natural gas for July delivery closed at Rs 195.8/mmbtu, lower by Rs 2/mmbtu (1%).

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