Crude rises for fourth straight day

Prices rise after crude inventories rise for third straight week

Crude-oil futures touched a fresh record above $123 today, 07 May, 2008, Wednesday following a U.S. government report which showed that crude supplies climbed for a third week in a row, but that refinery capacity declined. Price fell immediately after the data was released but soon it started spiraling up and closed $1.5/barrel higher for the day. Prices for crude oil have been hovering around $122 against a backdrop of disruptions to oil production in Nigeria.

Crude-oil futures for light sweet crude for June delivery closed at $123.53/barrel (higher by $1.69/barrel or 1.4%) on the New York Mercantile Exchange. Price dropped to $119 earlier during the day. In the past four sessions, crude prices have gone up by almost $11 (9.7%). For the year, crude is up by 26.7% till date.

EIA reported today that crude supplies rose 5.7 million barrels to 325.6 million for the week ended 2 May. Supplies of oil have now climbed a total of 11.9 million barrels over the past three weeks.

EIA also reported that motor gasoline supplies climbed 800,000 barrels to 211.9 million barrels last week and distillate stocks were down 100,000 barrels at 105.7 million barrels. The decline in distillate supplies last week came as refinery utilization fell to 85.0% of capacity from 85.4% a week earlier

On the currency markets today, the dollar rose as downbeat U.S. home sales data failed to offset the effects of weak U.K. and euro-zone data earlier. The dollar index, which measures the greenback against a basket of six major currencies, was at 73.52 as against last day’s 73.015.

June natural gas rose 18 cents to close at $11.33 per million British thermal units.

Against this backdrop, June reformulated gasoline closed at $3.12 a gallon, up 1 cent, and June heating oil gained 10 cents to end at $3.45 a gallon.

EIA reported yesterday that global oil consumption will likely grow by 1.2 million barrels per day this year, but the consumption of liquid fuels and other petroleum is expected to decline by around 190,000 barrels per day because of the economic slowdown and high petroleum prices. The EIA also expects regular gasoline prices to average $3.52 per gallon this year, up 71 cents from a year ago.

Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.

At the MCX, crude oil for May delivery closed at Rs 5,088/barrel, higher by Rs 111 (2.2%) against previous day’s close. Natural gas for July delivery closed at Rs 466.9/mmbtu, higher by Rs 6.3/mmbtu (1.4%)