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Friday, September 04, 2009

Crude ends little lower

Prices witness another full day of volatile session

Crude prices ended little lower on Thursday, 03 September, 2009. Prices remained volatile for entire day as the initial claims report hit the wires today.

On Thursday, crude-oil futures for light sweet crude for October delivery closed at $67.96/barrel (lower by 9 cents or 0.1%). During intra day trading, crude touched a high of $69.40 but also fell to a low of $67.66. Last week, crude ended higher by 9.5%. It was the biggest weekly gain for crude in three 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%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar, against a basket of six other currencies ended slid by 0.7%. The dollar moved lower against the euro and the British pound but remained higher against the Japanese yen.

Among economic reports expected on Thursday, The Labor Department reported on Thursday, 03 September, 2009 that the number of people filing for state unemployment benefits for the first time fell by 4,000 to a seasonally adjusted 570,000 last week.

Initial claims have held in a fairly narrow range for the past seven weeks, down about 100,000 from the peak in March but still well above levels seen in a healthy economy.

EIA reported yesterday 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 Thursday, October reformulated gasoline fell 1.58 cents, or 0.9%, to $1.7928 a gallon. October heating oil lost 1.55 cents, or 0.9%, to $1.735 a gallon.

October natural gas fell 20.7 cents, or 7.6%, to $2.508 per million British thermal units. EIA reported today 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.

At the MCX, crude oil for September delivery closed higher by Rs 10 (0.3%) at Rs 3,340/barrel. Natural gas for September delivery closed lower by Rs 11 (8.1%) at Rs 125.3/mmbtu.

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