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Thursday, July 23, 2009

Crude ends higher

Prices rise on encouraging earning report

Crude price ended higher on Tuesday, 21 July, 2009. Prices registered gains today as earning reports signaled at a somewhat ending recession.

On Tuesday, crude-oil futures for light sweet crude for August delivery closed at $64.72/barrel (higher by $0.74 or 1.2%). The August contract expired today. The more-active September contract increased 32 cents, or 0.5%, to end the session at $65.61 a barrel. 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% till date. Year to date, in 2009, crude prices are higher by 44.6%.

It was totally an earnings day today at Wall Street. Dow component Caterpillar easily topped second quarter consensus estimates. It also issuing upside earnings guidance for the third quarter. Revenue dropped dramatically, down 41.5% year-over-year to $7.98 billion, but the company offered encouraging commentary regarding its outlook, stating, "There is still a great deal of economic uncertainty in the world, but we are seeing signs of stabilization that we hope will set the foundation for an eventual recovery. Credit markets have improved significantly. Fiscal policy and monetary stimulus have been introduced around the world, and we are seeing signs, particularly in China, that they are beginning to work."

Also at the Nymex on Tuesday, Gasoline for August delivery climbed 2.26 cents, or 1.3 percent, to $1.812 a gallon in New York, the highest settlement since July 1. Heating oil for August delivery increased 0.9 cent, or 0.5 percent, to end the session at $1.6984 a gallon.

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 13 (0.41%) at Rs 3,162/barrel. Natural gas for August delivery closed at Rs 186.9/mmbtu, higher by Rs 1.1/mmbtu (0.6%).

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