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Thursday, December 02, 2010

Crude ends substantially higher

Weak dollar and economic data pull up prices 

Crude prices rose substantially on Wednesday, 01 December 2010 at Nymex. Prices rose due to a host of factors. Weak dollar and strong economic data pulled up crude prices higher. Prices rose despite energy department reporting an unexpected rise in crude inventories for last week. 

On Thursday, crude oil futures for light sweet crude for January delivery closed higher by $2.64 (3.1%) at $86.75/barrel. Prices gained 3.2% in November. 

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 7%. 

In the latest weekly inventory report, the energy department reported an increase of 1.1 million barrels in the nation's stockpiles of crude. The EIA also said gasoline inventories added 600,000 barrels, while supplies of distillates, which include diesel and heating oil, declined 200,000 barrels. 

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies fell 0.5%. 

Among economic data expected for the day, the ISM Manufacturing Index for November eased to 56.6 after a reading of 56.9 in the prior month, but that was still in stride with the expected reading of 56.5. Construction spending in October increased 0.7%, just as it did the month before as against a 0.5% decline. 

Separately, the Labor Department revised its third-quarter productivity estimate on nonfarm U.S. businesses, saying it rose at a 2.3% annual rate in the quarter, up from the 1.9% estimate offered a month ago. 

Among other energy products on Wednesday, gasoline futures shrugged off the weekly data. January gasoline vaulted 11 cents, or 5.2%, to $2.30 a gallon. Also on Wednesday, January heating advanced 8 cents, or 3.5%, to $2.41 a gallon. 

Natural gas for January delivery overcame a midsession bout of weakness to settle 9 cents higher at $4.27 per million British 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.
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