Prices rise as gasoline inventories show unexpected drop
Crude prices ended substantially higher at Nymex on Thursday,
15 October, 2009 and ended at the highest level in a year. Prices rose
today after the weekly inventory report by energy department showed
sudden drop in gasoline inventories for last week. The report came a
day late due to the Columbus day holiday on Monday.
On Thursday, crude-oil futures for light sweet crude for
November delivery closed at $77.58/barrel (higher by $2.40 or 3.2%).
Last week, crude ended higher by 2.8%.
For the month of September, 2009, crude ended higher by a
marginal 0.9%. For the third quarter, crude ended higher by just 1%.
Crude prices had rallied 40% and 11.3% in the second and first quarter
of 2009 respectively.
Oil prices had reached a high of $147 on 11 July, 2008 but
have dropped almost 55% since then. Year to date, in 2009, crude prices
are higher by 53.5%.
In the latest weekly inventory report, EIA reported a
build-up of 400,000 barrels in crude inventories against an increase of
2 million barrels. Also, as per the report, gasoline inventories fell
by 5.2 million barrels in the week ended 9 October, 2009 against an
expectation of build up. Distillate inventories, which include diesel
and heating oil, fell 1.1 million barrels.
Also as per the report, gasoline production fell to 8.45
million barrels a day last week, the lowest level since last September.
Refinery utilization rate stood at 80.9%, the lowest level since April.
Crude imports fell 367,000 barrels from a week ago.
In the latest monthly report, the Organization of the
Petroleum Exporting Countries, earlier this week, raised its forecast
for world oil demand by 200,000 barrels a day for both this year and
2010. After the revision, world oil demand in 2009 is expected to
average 84.2 million barrels a day, which represents a decline of 1.4
million barrels from 2008 levels. In 2010, global oil demand is
expected to average 84.9 million barrels a day, marking a growth of
700,000 barrels a day from 2009 levels.
Last week, Paris based, The International Energy Agency raised
its forecasts for global oil demand for both this year and 2010, citing
more optimistic economic estimates issued by the International Monetary
Fund. The agency raised its expectations by 200,000 barrels a day, to
average demand of 84.6 million barrels a day, for 2009, and by 350,000
barrels a day, to 86.1 million barrels a day, for 2010. Despite the
increased forecasts, global oil demand in 2009 will still be 1.9% below
last year's level.
In the currency market on Thursday, the dollar rose against
most of its rivals as US stocks pared some of their yesterday's gains.
The dollar index, which measures the strength of the dollar against a
basket of six other currencies, rose by 0.4%.
Among other energy related products, November reformulated
gasoline soared 8.74 cents, or 4.7%, to $1.9449 a gallon, and November
heating oil gained 7.54 cents, or 3.9%, to $2.0181 a gallon.
Also on Thursday, November natural-gas futures rose 4.6
cents, or 1%, to $4.482 per million British thermal units. EIA reported
today that natural gas inventories rose 58 billion cubic feet in the
week ended 9 October, 2009. At 3,716 billion cubic feet, stocks were
450 billion cubic feet higher than last year at this time and 474
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 October delivery closed higher by Rs
101 (2.9%) at Rs 3,554/barrel. Natural gas for October delivery closed
higher by Rs 2.1 (1.02%) at Rs 207.7/mmbtu.
