Crude inventories drop more than expected for last week
Crude prices pared ended
mildly lower on Wednesday, 08 December 2010 at Nymex. Prices fell as the
dollar pared earlier losses. Prices dropped as the dollar turned
strong. Prices also fell with anticipation about China's interest are
decisions and following the weekly energy inventory report.
On Wednesday, crude oil futures
for light sweet crude for January delivery closed lower by $0.41 (0.5%)
at $88.28/barrel. Prices gained 6.5% last week after gaining 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 9%.
In the weekly inventory report, the EIA reported a decrease for
crude-oil inventories in the week ended 3 December. But there was a
surprise increases in supplies of gasoline
and distillates, which include heating oil and diesel fuel. The EIA
said crude-oil inventories decreased by 3.8 million barrels, against
expectations of a 1.2 million-barrel decline. Gasoline inventories
increased by 3.8 million barrels, and supplies of distillates rose by
2.2 million barrels. That contrasted with expectations of an increase of
100,000 barrels for gasoline and a decline of 600,000 barrels for distillates.
In the currency market on
Wednesday, the dollar oscillated after strengthening earlier and
oscillated thereafter and finished the day with fractional gain. The
dollar index, which weighs the strength of the dollar against a basket
of six other competing currencies, ultimately pared its losses and ended
higher by 0.03%.
The market's concerns, however, centered around China's announcement it was moving up
the release date of key macroeconomic reports to Saturday from Monday.
That fueled fears an interest-rate hike could come as early as this
weekend, but China's statistics bureau said the change was aimed at
keeping the date of the monthly release consistent with previous months.
In its monthly short-term outlook report, the EIA reported yesterday that OPEC supply
is expected to increase by 400,000 barrels a day in 2011, 100,000 fewer
than what the EIA predicted in November. The Energy Information
Administration saw supplies from countries outside the Organization of Petroleum Exporting Countries
rising by 1 million barrels a day in 2011, contrasting with
expectations for a 250,000-barrel-a-day decrease in the EIA's November forecast. The EIA called for an increase of 300,000 barrels a day in OPEC supply for 2010, unchanged from the November outlook.
The agency also kept the view that global oil consumption will
slow to 1.4 million barrels a day in 2011 from a projected 2 million
barrels a day in 2010. Among rich countries, consumption in the U.S. is
expected to grow modestly by 200,000 barrels a day.
Among other energy products on Wednesday, gasoline for January delivery retreated 2 cents, or 0.8%, to end at $2.30 a gallon.
Natural-gas futures bucked the downward trend, rising 21 cents,
or 4.9%, to close at $4.61 per million British thermal units. The EIA is
expected to report on Thursday that natural-gas stocks fell between 82
billion and 86 billion cubic feet last week.
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 4,007/barrel.
Natural gas for December delivery closed at Rs 207.1, higher by Rs 7
(3.5%).
