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Tuesday, November 16, 2010

Crude ends marginally lower

Prices drop due to mixed economic data
 
Crude prices ended marginally lower on Monday, 15 November 2010 at Nymex. Prices fell due to mixed set of economic reports and the dollar staying strong. 

On Monday, crude oil futures for light sweet crude for December delivery closed lower by 2 cents at $84.86/barrel. Last week, crude lost 2.3%. 

For the month of October, crude ended higher by 1.8%. In 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 8%. 

The Commerce Department in US reported on Monday, 15 November 2010 that retail sales jumped 1.2% in October, the largest increase since March 2010. 

U.S. retail sales grew sharply in October, marking the fourth straight monthly gain, as consumers flocked to auto showrooms and made more purchases online. Sales for September and August were also revised higher. Excluding motor vehicles, however, retail sales rose a more modest 0.4%. 

Sales between August and October have growth 6.3% compared to the same period of 2009. Retail sales were revised to 0.7% growth in September, compared to an original reading of 0.6% growth, while August sales growth were revised up to 0.9% from 0.7%. 

The Federal Reserve Bank of New York's Empire State manufacturing survey reported on Monday, 15 November 2010 that conditions for New York area manufacturers deteriorated sharply in November, with a regional survey turning negative for the first time since July 2009. A steep drop in the new-orders components of the index, as well as a big drop in shipments, sent the reading into negative territory. 

The Federal Reserve Bank of New York's Empire State manufacturing survey fell to a reading of negative 11.1, from the 15.7 seen in October. The release was far worse than market expectations for a 15 reading and marks the first negative level since July 2009. 

On last Friday, the International Energy Agency revised higher its global demand forecast for oil products this year, by 200,000 barrels a day to 2.3 million barrels a day, or 2.8% growth on-year. As per the report, global oil demand is now expected to average 87.3 million barrels a day in 2010. For 2011, the IEA kept its growth forecast broadly unchanged at 1.2 million barrels a day, or 1.4% growth year on year, with demand seen averaging 88.5 million barrels a day. 

Earlier, Energy Information Administration increased its expectations for U.S. fuel consumption this year. The agency released its monthly outlook on Tuesday, also increasing its expectations for domestic oil production. As per the agency, global oil demand will be 2 million barrels per day. The EIA revised upward its estimate of global oil demand due to stronger-than-expected growth in European oil demand as well as continued strong growth in China. 

Among other energy products on Monday, December delivery for gasoline retreated 1 cent, or 0.7%, to 2.20 a gallon. Gasoline also had traded on the black for most of the session.
Also on Monday, December natural gas kept its gains intact. The contract added 5 cents, 1.2%, to $3.85 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 higher by Rs 24 (0.6%) at Rs 3,854/barrel. 

Natural gas for November delivery closed at Rs 172.2, lower by Rs 1.3 (0.7%).
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