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Friday, June 19, 2009

Crude ends little higher

Demand chances take prices higher after a day of volatile trading

Crude oil prices ended little higher on Thursday, 18 June, 2009 at Nymex. Encouraging batch of economic reports hinting at a possible recovery of the US economy in the near term raised the possibility of higher demand of crude in coming months. Yesterday's weekly inventory report showing more than expected draw in crude inventories for last week also helped crude end higher.

On Thursday, crude-oil futures for light sweet crude for July delivery closed at $71.37/barrel (higher by $0.34 or 0.5%). During intra day trading, crude fell to a low of $69.6 and also rose to a high of $71.75. Last week, crude ended higher by 5.3%.

Crude 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 51% since then. Year to date, in 2009, crude prices are higher by 42%.

On Thursday, Comex silver futures for July delivery fell 4 cents (0.3%) at $14.24 an ounce. Last week, silver ended lower by 3.3%. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 29.5% this year. For 2008, silver had lost 24%.

The Labor Department reported on Thursday, 18 June, 2009 that continuing U.S. jobless claims took a big drop in the latest week that ended on 6 June, 2009, in a sign that fewer people are having trouble finding employment. Continuing claims fell by 148,000 to 6.68 million during the week ended 6 June, the lowest level in about a month. The four-week average of continuing claims rose, however, by 2,250 to 6.75 million.

EIA reported yesterday that crude supplies decreased by 3.9 million barrels last week to stand at 357.7 million barrels for the week ended 12 June, 2009. Market had expected a decline of 1.7 million barrels. EIA also reported that gasoline inventories rose by 3.4 million barrels during the week and distillate inventories rose by 0.3 million barrels last week. Over the last four weeks, motor gasoline demand has averaged nearly 9.3 million barrels per day, up by 1.1% from the same period last year.

Also at the Nymex on Thursday, July reformulated gasoline slid 0.2% to $2.0295 a gallon, and July heating oil fell 1.4% to $1.837 a gallon.

July natural gas fell 16 cents, or 3.8%, to $4.093 per million British thermal units. EIA reported today that U.S. natural gas inventories rose 114 billion cubic feet in the week ended 12 June. At current consumption levels of 23.2 trillion cubic feet a year, the reserves can support 89 years of consumption.

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 3,478/barrel, higher by Rs 61 (1.78%) against previous day's close. Natural gas for July delivery closed at Rs 209/mmbtu, lower by Rs 3.1/mmbtu (1.4%).

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