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Monday, October 05, 2009

Job report weighs on crude price

Prices manage to gain healthy weekly gains

Crude prices ended lower at Nymex on Friday, 02 October, 2009. Prices fell following a disappointing job report that hit the wires at Wall Street on Friday. With Friday's losses, crude curtailed its weekly gains also.

On Friday, crude-oil futures for light sweet crude for November delivery closed at $69.95/barrel (lower by $0.87 or 1.2%). During intra day trading, it fell to a low of $68.27. For the week, crude ended higher by 6%.

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 67% since then. Year to date, in 2009, crude prices are higher by 44%.

The Labor Department reported on Friday that 263,000 payroll jobs were lost in September and the unemployment rate rose to a 26-year high of 9.8%. Market expected a decline of 167,000 jobs. September was the 21st consecutive month of job losses. Since the recession began in December 2007, 7.2 million jobs have been lost and the unemployment rate has doubled.

In the currency market on Friday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.5%. The dollar lost almost all its strength against the euro.

Among other energy products on Friday, November reformulated gasoline fell 1.7 cents, or 1%, to $1.7409 a gallon and November heating oil dropped 3.06 cents, or 1.7%, to $1.7968 a gallon.

Also on Friday, November natural-gas futures rose 25.2 cents, or 5.6%, to $4.718 per million British thermal units. The contract dropped more than 7% in the previous session.

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

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