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Monday, September 07, 2009

Crude ends little higher

Prices register largest weekly loss in two months

Crude prices ended little higher on Friday, 04 September, 2009. Prices ended higher due to better than expected job report from Labor Department.

On Friday, crude-oil futures for light sweet crude for October delivery closed at $68.02/barrel (higher by 6 cents or 0.1%). During intra day trading, crude touched a high of $69.70 but also fell to a low of $67.12. For the week, crude ended lower by 6.5%. It was the biggest weekly loss for crude in two months.

For the month of August, 2009, crude ended higher by a marginal 0.7%. 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 56% since then. Year to date, in 2009, crude prices are higher by 42%.

Among economic reports expected on Friday, The Labor Department reported on Friday, 04 September, 2009 that U.S. unemployment rate jumped to a 26-year high of 9.7% in August as nonfarm payrolls fell by 216,000, the 20th consecutive monthly decline. The report showed that U.S. payrolls have dropped by 6.9 million to a total of 131.2 million since the recession began in December 2007. Unemployment has increased by 7.4 million during the recession to stand at 14.9 million.

EIA reported earlier during the week that crude inventories fell by 400,000 barrels during last week. Market had expected a decline of 1.9 million barrels. At 343.4 million barrels, crude inventories stand at a level above the upper boundary of the average range for this time of year. Utilization rate rose to 87.2% of capacity. Rising input was partly offset by another jump in crude imports. The U.S. imported 9.58 million barrels a day of crude last week, up 3.8% from a week ago.

EIA had also reported that gasoline inventories fell by 3 million barrels last week. Distillates, however, rose by 1.2 million barrels.

Also at the Nymex on Friday, October reformulated gasoline fell 1.65 cents, or 0.9%, to $1.7763 a gallon. October heating oil fell 1.45 cents, or 0.8%, to $1.7205 a gallon.

Natural gas rallied 22 cents, or 8.8%, to $2.728 per million British thermal units. The contract tumbled more than 7% in the previous session. Natural gas ended the week down 10%. EIA reported on Thursay that U.S. natural gas inventories rose 65 billion cubic feet in the week ended 28 August, 2009. At 3,323 billion cubic feet, stocks were 489 billion cubic feet higher than last year at this time and 501 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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