Crude ends little lower

Crude prices give up early gains following natural gas inventory report

Crude prices closed more than $2 /barrel earlier today, Thursday, 15 May, 2008 but ultimately ended a little lower for the day. The dollar fluctuating against its rivals and the energy department’s report regarding the natural gas inventories was the main reason for the drop in crude prices. Crude-oil futures closed slightly lower pressured by weakness in natural-gas prices and options expiration-related volatility. Prices for crude oil have been hovering around $125 for quite some time now against a backdrop of disruptions to oil production in Nigeria.

Crude-oil futures for light sweet crude for June delivery today closed at $124.12/barrel (lower by $0.1/barrel or 0.1%) on the New York Mercantile Exchange. Price touched a low of $120.9 earlier during the day.

Last week, crude prices ended higher by 8.8%. For the year, crude is up by 25.8% till date.

Contributing to oil's decline, natural gas prices fell sharply. The natural gas sector was among the biggest losers in the energy sector after a U.S. report showed a bigger-than-expected rise in supplies for last week.

The Energy Department reported today that natural-gas inventories rose by 93 billion cubic feet for the week ended 9 May against an expected figure of 85 billion. Total stocks now stand at 1.529 trillion cubic feet, down 286 billion cubic feet from the year-ago level but 3 billion cubic feet above the five-year average.

Prices for June natural gas fell by 20 cents, or 1.7%, to finish at $11.40 per million British thermal units.

At the MCX, crude oil for May delivery closed at Rs 5,187/barrel, lower by Rs 86 (1.6%) against previous day’s close. Natural gas for July delivery closed at Rs 481.9/mmbtu, lower by Rs 11.2/mmbtu (2.3%).