HOME         WEBSITE         SUBSCRIBE           E-GREETINGS   
                               

Friday, December 11, 2009

Crude stays around $70 level

Natural gas prices spurt up by almost 8% as inventories drop unexpectedly 


Crude prices extended its losing streak and ended lower for seventh straight day on Thursday, 10 December, 2009. Prices remained around $70 barrel and also dropped below that for a brief period of time on that day. But natural gas prices registered a sharp rise.

On Thursday, crude-oil futures for light sweet crude for January delivery closed at $70.54/barrel (lower by $0.13 or 0.2%). The contract has lost almost 10% in the past seven sessions. Last week, crude ended lower by 0.8%. 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 57.3% since then.

In the currency market on Thursday, the dollar stayed relatively steady against its counterparts. But the euro climbed up more than 0.1% against the dollar.

Among economic data today, The Labor Department in US reported on Thursday, 10 December, 2009 that the number of people filing claims for state unemployment benefits rose by 17,000 to a seasonally adjusted 474,000 in the week ending 5 December, 2009. Market had expected initial claims to fall to about 450,000. The total number of people claiming benefits of any kind topped 10 million. First-time claims, which measure new layoffs, rose for the first time in six weeks in the week after Thanksgiving.

The EIA reported a day earlier that U.S. gasoline inventories rose 2.2 million barrels in the week ended 5 December, 2009. Distillate stockpiles, which include heating oil and diesel, rose 1.6 million barrels.

The Energy Department also reported on Wednesday that crude inventories fell 3.8 million barrels last week against an expected increase of 800,000 barrels. At 336.1 million barrels, crude inventories were above the upper limit of the average range for this time of year. Total petroleum inventories, including crude oil, gasoline and other fuels, decreased by 4.3 million barrels last week to 1,086.3 million barrels, also above the upper limit of the average range for this time of year.

Crude inventories dropped during the week as crude imports fell 3.1% to 8.14 million barrels a day last week. Refineries used 13.9 million barrels a day of oil last week, up 0.6% from a week ago. The utilization rate rose slightly to 81.1%, a level that's still much lower than last year.

Earlier during the week, in the latest monthly report the EIA reported that it expects oil prices to average $76 a barrel this winter from October to March. The price target came just $1 lower than the previous month's forecast. The agency expects prices will dip to $75 early next year and will then rise to $82 a barrel by December 2010.

The report also suggested that the average retail price for regular gasoline will rise to $2.83 a gallon next year from this year's $2.35 a gallon and that pump prices could approach $3 a gallon during next year's driving season. The EIA also said U.S. oil consumption is projected to average 18.7 million barrels a day this year, about 800,000 barrels a day, or 4.1%, lower than last year. Oil demand will rise 270,000 barrels a day next year from this year's level.

Among other energy products on Thursday, January gasoline slid 2.22 cents, or 1.2%, to $1.8351 a gallon, January heating oil fell slightly to $1.9029 a gallon.

Also on Thursday, natural gas for January delivery rose 40 cents, or 8.2%, to $5.298 per million British thermal units on the New York Mercantile Exchange. EAI reported today that after nearly nine months of build-ups, natural gas stockpiles declined from their record highs, down 64 billion cubic feet in the week ended 4 December, 2009. Despite the decline, natural gas stocks, at 3,773 billion cubic feet, were still 472 billion cubic feet higher than last year at this time and 513 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 December delivery closed lower by Rs 44 (1.3%) at Rs 3,279/barrel. Natural gas for December delivery closed higher by Rs 11.6 (4.9%) at Rs 246.2/mmbtu.
Posted by

Blog Archive

____________________________________________________________________________________________

Disclaimer - All investments in Mutual Funds and securities are subject to market risks and uncertainty of dividend distributions and the NAV of schemes may go up or down depending upon factors and forces affecting securities markets generally. The past performance of the schemes is not necessarily indicative of the future performance and may not necessarily provide a basis for comparison with other investments. Investors are advised to go through the respective offer documents before making any investment decisions. Prospective client(s) are advised to go through all comparable products in offer before taking any investment decisions. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the fund will be achieved. Information gathered & material used in this document is believed to be from reliable sources. Decisions based on the information provided on this newsletter/document are for your own account and risk.


In the preparation of the material contained in this document, Varun Vaid has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the Varun Vaid and which may have been made available to Varun Vaid. Information gathered & material used in this document is believed to be from reliable sources. Varun Vaid however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no such party will assume any liability for the same. Varun Vaid does not in any way through this material solicit any offer for purchase, sale or any financial transaction/commodities/products of any financial instrument dealt in this material. All recipients of this material should before dealing and or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice.


Varun Vaid, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this material. All recipients of this material should before dealing and/or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice. The investments discussed in this material may not be suitable for all investors. Any person subscribing to or investigating in any product/financial instruments should do soon the basis of and after verifying the terms attached to such product/financial instrument. Financial products and instruments are subject to market risks and yields may fluctuate depending on various factors affecting capital/debt markets. Please note that past performance of the financial products and instruments does not necessarily indicate the future prospects and performance there of. Such past performance may or may not be sustained in future. Varun Vaid, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation in the financial instruments/products/commodities discussed here in or act as advisor or lender / borrower in respect of such securities/financial instruments/products/commodities or have other potential conflict of interest with respect to any recommendation and related information and opinions. The said person may have acted upon and/or in a manner contradictory with the information contained here. No part of this material may be duplicated in whole or in part in any form and or redistributed without the prior written consent of Varun Vaid. This material is strictly confidential to the recipient and should not be reproduced or disseminated to anyone else.


Varun Vaid also does not take any responsibility for the contents of the advertisements published. Readers are advised to verify the contents on their own before acting there upon.


Published Credits goes to following sources & all the mentioned sources as footer below the published material- Bloomberg, Valueresearch Online, Capital Market, Navindia, Franklin Templeton, Kitco, SBI AMC, LIC AMC, JM Financial AMC, HDFC AMC, The Hindu, Business Line, Personal FN, Economic Times, Reuters, Outlook Money, Business Standard, Times of India etc.