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Thursday, July 23, 2009

Crude drops marginally

Prices drop for first time in six sessions as crude product stockpiles soar

Crude price ended lower on Wednesday, 22 July, 2009. This was the first drop for crude in six sessions. Prices fell today as energy department reported increase in crude product stockpiles for last week.

On Wednesday, crude-oil futures for light sweet crude for September delivery closed at $65.4/barrel (lower by $0.21 or 0.3%). It dropped to $63.76 earlier during the day. Last week, crude ended higher by 6.1%.

For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55% since then. In July, 2009, it has dropped by 7.3% till date. Year to date, in 2009, crude prices are higher by 44.3%.

EIA reported today that total inventories of crude, gasoline and other petroleum products rose 1.9 million barrels in the week ended 17 July, 2009 to 1,117.6 million barrels, up for a sixth straight week to the highest level since September 1990. But crude oil inventories fell last week as the U.S. imported less oil, but inventories gains in gasoline and other products were more than the drop in crude. Meanwhile, petroleum demand rose slightly, but still stayed way below last year's level.

The report said that crude oil inventories fell by 1.8 million barrels last week. Gasoline inventories rose by 800,000 barrels and distillate stockpiles, which include diesel and heating oil, increased by 1.2 million barrels.

EIA also reported that while refiners used less crude in their production, oil imports fell by 346,000 barrels a day last week, resulting in a drop in crude inventories. Refinery inputs averaged 14.8 million barrels a day, down 300,000 barrels from a week ago. Utilization rate stood at 85.8%. Total petroleum products supplied, an implied gauge of consumption, rose to 18.917 million barrels a day last week, up 0.3% from a week ago. Consumption was still nearly 1 million barrels a day lower compared with a year ago.

Also at the Nymex on Wednesday, August reformulated gasoline rose 2.63 cents, or 1.5%, to $1.8383 a gallon and August heating oil rose 1.28 cents, or 0.8%, to $1.7112 a gallon.

August natural gas futures gained 8.8 cents, or 2.4%, to $3.793 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 August delivery closed higher by Rs 8 (0.25%) at Rs 3,170/barrel. Natural gas for August delivery closed at Rs 194.7/mmbtu, higher by Rs 7.8/mmbtu (4.2%).

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