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.