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Thursday, October 28, 2010

Crude prices slip

Higher crude stockpiles and rising dollar push prices lower 

Crude oil prices ended lower on Wednesday, 27 October 2010 at Nymex. Rising crude oil inventories for last week coupled with strong dollar pushed prices lower for the day. 

On Wednesday, crude oil futures for light sweet crude for December delivery closed at $81.94/barrel (lower by $0.61 or 0.7%). Last week, crude ended lower by 0.3%, its third consecutive weekly losses. 

For the month of September, crude prices ended higher by 11.2%. For the third quarter, crude ended higher by 5.7%. Crude had 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 higher by 9.3%. 

In the latest weekly inventory report, the Energy Information Administration said today that crude-oil inventories rose 5 million barrels last week. Gasoline supplies decreased 4.4 million, and distillate inventories decreased by 1.6 million. 

In the currency market on Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 0.6%. Speculation that any future measures of quantitative easing might be applied gradually or be smaller in scope than had been hoped propped up the dollar today. 

Government report in US showed on Wednesday, 27 October 2010 that sales of new homes climbed 6.6% in September 2010 representing the second straight month of gains, but still well below the pace when a tax credit existed. As per the report, sales of new single-family homes rose 6.6% to a seasonally adjusted annualized rate of 307,000, which is stronger than the 300,000 that market expected. Still, the pace of new-home sales is 21.5% below the same level of last year. 

The Commerce Department in US reported on Wednesday, 27 October 2010 that a strong gain in civilian aircraft boosted orders for durable goods in September 2010 to their largest increase since January. As per the report, orders rose 3.3% in September. Civilian aircraft accounted for most of the increase in September. Aircraft orders rose 105% in September after a 30% decline in the prior month. 

Also on Wednesday, natural gas for December delivery retreated less than a penny to $3.76 per million British thermal units. 

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 November closed lower by Rs 34 (0.91%) at Rs 3,663/barrel. Natural gas for November delivery closed at Rs 170, higher by Rs 1.19 (1.3%).
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