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Monday, August 31, 2009

Crude registers healthy weekly gains

Price pare earlier losses and register marginal gains

Crude prices erased earlier losses and ended higher for the day on Friday, 28 August, 2009. Prices crawled up today following some hopes about current economic scenario from the latest economic data.

On Friday, crude-oil futures for light sweet crude for October delivery closed at $72.74/barrel (higher by $0.25 or 0.3%). During intra day trading, crude fell to a low of $71.58 and also rose to a high of $73.3/barrel. For the week, crude ended higher by 9.5%. It was the biggest weekly gain for crude in three months.

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 53% since then. Year to date, in 2009, crude prices are higher by 48.8%.

Among economic reports expected on Friday, data showed that U.S. personal incomes were unchanged in July as consumer spending increased 0.2%, led by higher outlays for autos and other durable goods. In a separate report, the University of Michigan/Reuters survey showed that U.S. consumer sentiment improved in late August, but not by enough to exceed the reading from July, 2009.

EIA reported earlier during the week that U.S. crude inventories rose 200,000 barrels in the week ended 21 August, as imports jumped 14% from the prior week. In the weekly report, the EIA also reported gasoline stockpiles fell 1.7 million barrels last week while distillate fuels, which include diesel and heating oil, rose 800,000 barrels.

The report also detailed that total gasoline supplied, an implied gauge of demand for the fuel, fell 1.1% from a week ago to 9.1 million barrels a day. But total petroleum products supplied rose slightly, to 19.5 million barrels a day, as small increases in jet fuel and residual oil demand offset the decline in gasoline.

Also at the Nymex on Friday, September reformulated gasoline gained slightly to $2.0703 a gallon and September heating oil edged up to $1.8625 a gallon.

On Friday, natural gas for October delivery, the new front-month contract, fell 15.1 cents, or 4.7%, to $3.054 per million British thermal units. The EIA reported one day before that gas in storage rose by 54 billion cubic feet to stand at 3.258 trillion cubic feet during the week ended 21 Aug, 2009. Gas stockpiles were 516 billion cubic feet higher than last year at this time and 500 billion cubic feet above the five-year average.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

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