Prices rise beyond $92 and also fall back to $90 during intraday trade
Crude oil prices went through some volatile trading range today. Prices dropped to almost $90/barrel at one end but also crossed $92/barrel at the other end. But going into close, prices closed marginally higher. Prices fell after Energy Department reported less than expected drop in natural gas inventory for the week ended 14 December.
For the day ending Thursday, 20 December, 2007, crude-oil futures for light sweet crude for February delivery closed at $91.04/barrel (lower by $0.20/barrel or 0.2%) on the New York Mercantile Exchange. Futures rose as high as $92.25 earlier in the day and fell as low as $90.57 in trading today. Prices are 43% higher than the year before.
Yesterday, the Energy Department, reported that U.S. crude inventories fell by 7.6 million barrels to 296.9 million barrels in the week ending 14 December, the lowest since February 2005. That was the fifth straight week of drop. U.S. refineries operated at 87.8% of their operable capacity last week, down 1% from the previous week's 88.8%.
As per EIA, at 296.9 million barrels, U.S. crude inventories were in the lower half of the average range for this time of year and at lowest level since February, 2005. U.S. crude-oil imports averaged 9.1 million barrels per day last week, down 952,000 barrels per day from the previous week.
Brent crude oil for February settlement fell $0.60 (0.7%) to $90.88 on the London-based ICE Futures Europe exchange.
Natural gas gives up earlier gains as inventory drops less than expected
Natural gas prices erased earlier gains and closed lower for the day. The EIA reported today that U.S. natural gas inventories dropped 121 billion cubic feet to 3,173 billion cubic feet in the week ending 14 December, less than expected figure of 129 billion cubic feet. Natural-gas futures for January delivery fell 4.2 cents to $7.137 per million British thermal units.
Against this backdrop, January reformulated gasoline gained 0.43 cents to $2.3320 a gallon and January heating oil fell 0.84 cent to $2.5895 a gallon.
As per EIA, global oil markets will likely remain tight through 2008 and monthly average oil prices are expected to near $85 per barrel over the next year. The IEA, an adviser to 27 nations, said global demand in 2008 will rise 2.5% to 87.8 million barrels a day.
At the MCX, crude oil for January delivery closed at Rs 3,619/barrel, higher by Rs 22 (0.61%) against previous day’s close. Natural gas for December delivery closed at Rs 284.1/mmtbu, higher by 4.6/mmtbu (1.6%).
Members of the OPEC left production targets unchanged at the 5 December meeting in Abu Dhabi. The group, which produces 40% of the world's oil, will review output at a 1 February, 2008 meeting in Vienna.