Natural gas prices shoot up due to cold front
Crude prices ended lower on Thursday, 17 December, 2009. Prices
fell as the dollar shot up to three month high levels as traders mulled
over the fact that Fed will take steps to boost the slipping dollar in
current times. But natural gas prices registered sharp rise due to the
cold front that has hit parts of US in recent times.
On Thursday, crude-oil futures for light sweet crude for
January delivery closed at $72.64/barrel (lower by $0.02 or 0.2%). It
fell to a low of $71.13 earlier during the day. Last week, crude ended
lower by 7.4%. Crude ended month of November, higher by 0.4%.
Oil prices had reached a high of $147 on 11 July, 2008 but
have dropped almost 56% since then. On a year to date basis, crude
prices are higher by 62%.
Prices rose considerably yesterday after EIA reported that
crude inventories fell by 3.7 million barrels last week. This was much
higher than expected as traders anticipated a drop of almost 2 millions
barrels for last week.
In the currency market on Thursday, the U.S. dollar rallied
to its highest level in more than three months, supported by a rush to
safety spurred by concerns about Greece's debt payments and a
reassessment of when the Federal Reserve could begin to tighten U.S.
monetary policy. The dollar index, which weighs the strength of dollar
against the basket of six other currencies rose by almost 1%.
In the latest report, OPEC, revised higher its forecast for
world oil demand next year by 70,000 barrels a day, to 85.13 million
barrels, citing demand from developing countries such as China and
India. However, the cartel said the pace of recovery in developed
countries, especially in the U.S., remained at risk and could dampen
demand.
The cartel also said that the supply of oil from non-OPEC
nations will likely expand by 500,000 barrels a day this year, slightly
higher than last month's forecast. In November, OPEC crude production
averaged 29.1 million barrels a day.
Last week, Paris-based IEA, hiked its forecast for 2010
global oil demand by 130,000 barrels a day to an average 86.3 million
barrels a day. That represents an increase of 1.7%, or 1.5 million
barrels a day, compared to 2009. The IEA also left its forecast for
2009 oil demand virtually unchanged at 84.9 million barrels a day, a
decline of 1.6% year-on-year.
Among other energy products on Thursday, January gasoline
fell 2 cents, or 1.2%, to $1.852 a gallon. Heating oil for January
delivery fell less than a penny, or 0.4%, to $1.9574 a gallon
Also on Thursday, natural gas for January delivery gained 31
cents, or 5.6%, to end at $5.77 per million British thermal units. EIA
reported today that natural gas in storage fell for the second week in
a row, this time by 207 billion cubic feet. That was the second weekly
drop in a row after nearly nine months of build-ups.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for December delivery closed lower by Rs
22 (0.64%) at Rs 3,380/barrel. Natural gas for December delivery closed
higher by Rs 16.7 (6.5%) at Rs 273.7/mmbtu.