Crude prices end little higher

Crude oil and natural gas end month 12% and 8% higher respectively

After marking a sharp drop a day before, crude prices ended little higher on Friday, 30 May, 2008. Weather was on everyone’s mind on that day and traders were keen on taking positions before the official start of the hurricane season. Prices fell to a two week low earlier in the season. The hurricane season in the Atlantic, which has the potential to disrupt oil and natural gas production in the Gulf of Mexico, officially begins on 1 June.

Crude-oil futures for light sweet crude for July delivery today closed at $127.35/barrel (higher by $0.73/barrel or 0.6%) on the New York Mercantile Exchange. Prices fell to a two week low of $125.7 earlier in the season.

For the week, crude prices closed lower by 3.7%. Last week, prices had touched an all time high of $135.09. The July contract ended last month at $112.73, so the contract itself is up 13% for the month. For the year, crude is up by 32% till date. Prices have more than doubled on a yearly basis.

Earlier during the week, the Energy Department reported that crude supplies dropped by 8.8 million barrels to 311.6 million for the week ended 23 May. The drop was reportedly due to temporary delays in crude oil tanker off-loadings. Refinery utilization was unchanged last week from the previous week at 87.9% of capacity.

EIA also reported that motor gasoline supplies fell 3.2 million barrels to 206.2 million barrels and distillate stocks were up 1.6 million barrels at 109.4 million barrels.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.