Weak economic data affects prices
Crude oil prices ended lower on Thursday, 17 June 2010 at
Nymex. Prices went down due to quite a few shaky economic reports that
hit Wall Street on Thursday questioning crude's demand in coming
months.
On Thursday, crude-oil futures for light sweet crude for July
delivery closed at $76.79/barrel (lower by $0.88 or 1.1%). Last week,
prices gained 3.1%.
For the month of May, crude shed 14%. It was the biggest
monthly drop for crude since December 2008. For the month of April,
crude rose 2.8%. For the first quarter of this year, crude rose by
5.5%. Year to date, crude is higher by 8.6%.
Among economic reports scheduled for the day, The Labor
Department in US reported on Thursday that first-time applications for
state unemployment benefits rose by 12,000 last week to a seasonally
adjusted 472,000, providing further evidence that U.S. labor markets
remain very weak. The jobless claims report shows that the level of
layoffs, while down from the peak a year ago, is too high to be
consistent with robust job growth. The economy is creating jobs, but
too few to bring the unemployment rate down meaningfully. Initial
claims are down about 24% compared with the same week a year ago but
are unchanged since the first of the year. Continuing claims are down
about 29% compared with a year ago and down about 9% since the first of
the year.
Also, the Labor Department said the consumer price index fell
0.2% in May, with core prices advancing 0.1%, as expected. Separately,
the Conference Board said the index of leading economic indicators rose
0.4% in May, signaling softer growth ahead. Finally, the Philly Fed
index fell to 8 in June from 21.4 in May, a sign that growth in the
manufacturing sector in the region could be softening.
US stocks traded flat in the early part of the session today but ultimately managed to end modestly higher.
In the weekly inventory report, the EIA reported yesterday an
increase of 1.7 million barrels in oil inventories in the week ended 11
June 11. Market expected a decrease of around 1.75 million barrels.
Gasoline inventories decreased by 600,000 barrels compared with
expectations of an increase around 640,000 barrels. Stocks of
distillates, which include heating oil and diesel, increased by 1.8
million barrels. Refineries operated at 87.9% of their capacity on the
week, 1.2% lower than a week earlier.
On Thursday, gasoline for July delivery added 2 cents, or 0.9%, to settle at $2.16 a gallon.
Also on Thursday, natural gas rallied after EIA's report on
weekly levels of natural gas in storage came in within expectations.
Natural gas for July delivery rose 18 cents, or 3.7%, to $5.16 per
million British thermal units. Energy Information Administration on
Thursday reported that stockpiles of natural gas increased by 87
billion cubic feet in the week ended 11 June. The build compares to an
increase of 113 billion cubic feet in the same week last year and a
five-year average increase of 84 billion cubic feet.
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. Crude prices had ended FY 2008 lower
by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed lower by Rs 70
(1.9%) at Rs 3,544/barrel. Natural gas for June delivery closed at Rs
235.9, higher by Rs 2.9 (1.2%).
