Prices drop due inventory and durable goods order data
Crude oil prices managed to pare part of their earlier losses on Wednesday, 28 July 2010 at Nymex but failed to inch up in the green. Prices dropped as energy department reported more than expected build up in crude inventories for last week and as durable goods order disappointed.
On Wednesday, crude oil futures
for light sweet crude for September delivery closed at $76.99/barrel
(lower by $0.51 or 0.7%). Earlier during the day, prices fell to a low
of $76.69. Last week, crude prices ended higher by 1.3%.
For the month of June, oil prices shed 2.7%. Crude ended second
quarter of CY 2010 lower by 9.3%. For the first quarter of this year,
crude rose by 5.5%. Year to date, crude is lower by 2.1%.
EIA reported on Wednesday an increase of 7.3 million barrels of
crude stockpiles for the week ended 23 July against an expected increase
of 2.3 million barrels. The EIA also reported an increase of 100,000
barrels for stockpiles of gasoline and 900,000 barrels for distillates.
Market had predicted weekly increases of 1.1 million barrels for
gasoline and 1.8 million barrels for distillates.
The Commerce Department reported on Wednesday, 28 July 2010 that
orders for new U.S. made durable goods decreased by 1% in June as
against an expected increase of 1%. The decline was the biggest one in
ten months time. Excluding a 2.4% decrease in transportation goods,
orders fell 0.6%, the second decline in the past three months. Orders
had fallen 0.8% in May, revised down from an originally estimated drop
of 0.6%.
The report also stated that shipments of durable goods fell 0.3%
in June after a 0.7% decrease in May. Inventories rose 0.9%, the sixth
straight gain. June's decline in orders and shipments are consistent
with other evidence pointing to a slowdown in manufacturing following a
strong rebound earlier in the year. The report detailed that orders for
transportation goods fell 2.4% in June, led by a 25.6% decline in
civilian aircraft.
In the currency market on Wednesday, the dollar index, which
measures the strength of the dollar against a basket of six other
currencies, fell by 0.1%.
Among other energy products on Wednesday, reformulated gasoline
for August delivery, which expired on Wednesday, lost a penny to $2.06 per gallon. September gasoline retreated 3 cents to $2.06 a gallon.
Also, on Wednesday, natural-gas futures bucked the trend
rallying 2.1% as there was no respite in sight for the summer heat
gripping many parts of the country. The August contract, the front-month
contract that expired on Wednesday, added 10 cents to $4.77 per million
British thermal units. Most-active September natural gas advanced 7
cents, or 1.6%, to $4.72 per million Btus.
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 August delivery closed lower by Rs 11
(0.3%) at Rs 3,613/barrel. Natural gas for August delivery closed at Rs
222.3, higher by Rs 5.2 (2.4%).
