A new high everyday for crude

Crude prices rise by more than 8% for the week

Crude-oil futures touched a fresh record once again near $126 on Friday, 09 May, 2008. It might be noted that crude prices touched a new high on all the individual days of the week that ended on Friday. Weaker dollar and tensions regarding overall global supplies were the main reasons to push crude prices higher. Prices for crude oil have been hovering around $125 against a backdrop of disruptions to oil production in Nigeria.

Crude-oil futures for light sweet crude for June delivery closed at $125.96/barrel (higher by $2.27/barrel or 1.8%) on the New York Mercantile Exchange. Price touched a high of $126.25 earlier during the day. In the past six sessions, crude prices have gone up by almost $13.5 (11.7%).

For the week, crude prices ended higher by 8.8%. Last week, prices closed at $116.3/barrel. For the year, crude is up by 28.6% till date.

On the currency markets on Friday, the greenback fell against other major currencies, with the dollar index was at 73.05, down from 73.478. Dollar weakness typically benefits dollar-denominated commodities, such as oil and gold, because it makes them cheaper for holders of other currencies.

EIA reported earlier this week 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

Natural gas for June delivery climbed 28 cents to close at $11.54 per million British thermal units. EIA reported on Thursday that natural-gas inventories rose by 65 billion cubic feet for the week ended 2 May. Total stocks now stand at 1.436 trillion cubic feet, down 284 billion cubic feet from the year-ago level and 11 billion cubic feet below the five-year average.

Against this backdrop, June reformulated gasoline gained 6 cents to end at $3.20 a gallon and June heating oil rose 13 cents to finish at $3.64 a gallon.

EIA reported earlier this week 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.