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Thursday, July 30, 2009

Crude plunges

Inventory report pushes crude substantially lower

Crude prices ended substantially lower on Wednesday, 29 July, 2009. Prices dropped as energy department reported more than expected build up in crude inventories for last week. The strong dollar was also responsible for the drop in price today.

On Wednesday, crude-oil futures for light sweet crude for September delivery closed at $63.35/barrel (lower by $3.88 or 5.8%). Last week, crude ended higher by 7.1%.

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 54.4% since then. In July, 2009, it has dropped by 10.3% till date. Year to date, in 2009, crude prices are higher by 36%.

EIA reported today that crude supplies rose by 5.1 million barrels to stand at 347.8 million barrels during the week ended 24 July, 2009.

The EIA also reported that motor gasoline inventories fell by 2.3 million barrels and distillate supplies rose by 2.1 million barrels last week.

In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose by more than 0.7%. The euro fell by more than 1% against the dollar.

Also at the Nymex on Wednesday, August reformulated gasoline fell 5 cents to end at $1.86 a gallon and August reformulated gasoline dropped 9 cents to finish at $1.67 a gallon.

August natural gas ended down 16 cents, or 4.5%, at $3.38 per million British thermal units. The contract expired at the end of trading today.

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 lower by Rs 156 (4.8%) at Rs 3,096/barrel. Natural gas for August delivery closed at Rs 171.9/mmbtu, lower by Rs 5.9/mmbtu (3.3%).

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