HOME         WEBSITE         SUBSCRIBE           E-GREETINGS   
                               

Friday, January 15, 2010

Crude stays below $80

Prices drop following disappointing batch of economic data 


Crude oil prices ended lower for fourth straight day on Thursday, 14 January 2010. Prices fell following disappointing batch of economic data spurring concerns about demand for oil in coming months. Prices also slipped as energy department reported yesterday in its latest weekly inventory report more than expected buildup in crude inventories for last week.

On Thursday, crude-oil futures for light sweet crude for February delivery closed at $79.29/barrel (lower by $0.26 or 0.3%). Crude ended last week higher by 4.3%. On a year to date basis till date, crude is lower by 0.3%.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 44% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies erased earlier gains and fell by almost 0.1%.

The Commerce Department in US reported on Thursday, 14 January 2010 that U.S. retail sales was disappointing in December, falling a seasonally adjusted 0.3% on widespread weakness across different kinds of stores. The decline was unexpected. Market was forecasting a 0.5% gain.

Separately, the Labor Department in US reported on Thursday, 14 January 2010 that first-time jobless claims rose last week by the largest amount in five weeks. Initial claims rose by 11,000 to 444,000 in the week ended 9 January 2010. This was the highest level since mid-December.

The EIA reported yesterday that crude-oil supplies rose by 3.7 million barrels in the week ended 8 January, 2009. Market was expecting a buildup of 1.9-million-barrel increase. The report also showed that U.S. distillate inventories were up 1.4 million barrels.

Earlier during the week, in its monthly short-term outlook, EIA reported that West Texas crude-oil prices, which averaged about $62 a barrel last year, will average about $79.83 this year and about $83.5 in 2011. Prices should average $77 in the first quarter and $85 in the fourth quarter this year. The forecast assumes U.S. growth of 2% this year and 2.7% in 2011. In its December outlook, the EIA forecast that world oil consumption will grow in 2010 by 1.1 million barrels a day to put the total daily figure at 85.2 million barrels.

Also on Thursday, natural gas for February delivery slumped 14 cents, or 2.4%, to $5.73 per British thermal units. The Energy Information Administration reported a drop of 266 billion cubic feet in storage of natural gas for last week, slightly more than expected.

At the MCX, crude oil for January delivery closed Rs 16 (0.3%) lower at Rs 3,634/barrel. Natural gas for January delivery closed lower by Rs 9.7 (3.7%) at Rs 252.1/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.