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Friday, August 14, 2009

Crude crawls up

Prices inch up due to weak dollar and positive global news

Crude prices ended higher on Thursday, 13 August, 2009. News that the German and French economies both logged second quarter growth of 0.3% coupled with weak dollar boosted crude prices today. But prices remained volatile and also fell earlier during the day.

On Thursday, crude-oil futures for light sweet crude for September delivery closed at $70.52/barrel (higher by $0.36 or 0.5%). During intra day trading, crude soared to an intraday high of $72.21 a barrel and fell to an intraday low of $69.81 a barrel on Globex. Last week, crude ended higher by 2.1%.

For the month of July, 2009, crude ended lower by a marginal 0.6%. 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 44% since then. Year to date, in 2009, crude prices are higher by 48.3%.

In the currency market on Thursday, the dollar index which weighs the value of dollar against a basket of six other currencies, fell by 0.4%.

Retail sales for July fell 0.1% when a 0.8% increase was expected. Excluding autos, sales were down a sharper-than-expected 0.6%. On the other hand, Wal-Mart provided better-than-expected earnings and a solid outlook.

EIA reported yesterday that crude supplies rose by 2.5 million barrels to stand at 352.0 million barrels during the week ended 7, August, 2009. That was higher than the 1.2 million barrels expected. The report also showed that gasoline stocks fell by 1 million barrels and distillate inventories rose by 800,000 barrels last week.

In the latest report, The International Energy Agency revised up its global oil-demand forecasts for 2009 and 2010 by 190,000 barrels a day and 70,000 barrels a day respectively, citing a stronger outlook for Asia for both years.

Also at the Nymex on Thursday, September reformulated gasoline ended marginally lower at $2.0192 a gallon compared with $2.0253 a gallon on Wednesday. September heating oil gained 1.07 cents to end at $1.9028 a gallon.

September natural-gas futures fell 14.30 cents to end at $3.336 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 17 (0.5%) at Rs 3,417/barrel. Natural gas for August delivery closed lower by Rs 5.7(3.35%) at Rs 164.2/mmbtu.

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