Prices rise to two years high levels as crude stockpiles drop last week
Crude prices shot up on Wednesday, 10 November 2010 at Nymex. Reports of drop in crude stockpiles last week pushed crude prices
higher to its highest levels in almost two years. Prices rose despite a
strong dollar. Positive economic data also impacted prices.
On Wednesday, crude oil futures
for light sweet crude for December delivery closed at $87.81/barrel
(higher by $1.09 or 1.3%). It was the highest closing for crude since
October 2008.
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 11.3%.
In the latest weekly inventory report, EIA reported a decline of
3.3 million barrels in the nation's crude-oil supplies in the week
ended 5 November. Market was expecting a buildup in crude inventories.
Gasoline stockpiles fell 1.9 million barrels and distillates dropped by 5
million barrels.
A day before, 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.
EIA also said on Tuesday that it expects the price of West Texas Intermediate crude oil
to average about $83 a barrel during the winter season running from 1
October through 31 March. That outlook is an increase of $5.50 a barrel
over last winter, and $3 a barrel more than the outlook it released last
month.
In the currency market on
Wednesday, the dollar index, which measures the strength of the dollar
against a basket of six other currencies, erased most of its initial
gains and ended higher by 0.2%.
The Labor Department in
US reported on Wednesday, 10 November 2010 that the number of workers
who filed new claims for unemployment benefits fell 24,000 last week to
435,000 for the week that ended on 6 November. Market had expected
initial claims to fall to a seasonally adjusted 450,000. The four-week
average of initial claims, however, sank to its lowest level in two
years, down 10,000 to 446,500.
The Commerce Department
in US reported on Wednesday, 10 November 2010
that the U.S. trade deficit narrowed in September as exports rose to
their highest level in more than two years. As per the report, the
nation's trade deficit contracted 5.3% in September to $44.0 billion
from $46.5 billion in August. The government initially pegged August's
deficit at $46.3 billion.
Additionally, the Labor Department in US reported on Wednesday, 10 November 2010 that due to rise in fuel costs, prices of goods imported into the United States rose 0.9% in October 2010. Prices for imports excluding fuels increased a smaller 0.3%.
Among other energy products on Wednesday, gasoline for December delivery added 5 cents, or 2.3%, to $2.24 a gallon.
Also on Wednesday, December natural gas contract lost 16 cents,
or 3.9%, to $4.05 per million British thermal units. It sold off through
out the session to end near its lows at $4.02.
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 29 (0.74%) at
Rs 3,901/barrel.
Natural gas for November delivery closed at Rs 182.2, lower by Rs 3.4
(1.8%).
