Crude remains almost unchanged

Crude prices register weekly gain for first time in a month

Crude prices ended little lower on Friday, 28 November, 2008. But prices ended with sufficient gains for the week. Crude prices pared all its earlier losses for the day and ended almost flat for the day after Energy department reported a build up in crude and gasoline inventories for last week on last Wednesday, 26 November, 2008.

On Friday, crude-oil futures for light sweet crude for January delivery closed at $54.43/barrel (lower by $0.01 or 0.05%) on the New York Mercantile Exchange. During intra day trading prices had dropped to a low of $51.5. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. For the week, prices rose by 9%, the first weekly gain in a month. For this year in 2008, crude prices have dropped 45%.

For the month of November, crude prices ended lower by 19.7%. Before this, for the month of October, 2008, crude prices had ended lower by 32.6%, the biggest monthly drop since 1983.

The EIA reported last Wednesday that crude inventories rose 7.3 million barrels to stand at 320.8 million barrels in the week ended 21 November, 2008. U.S. refineries operated at 86.2% of their operable capacity last week, up from the previous week's 84.9%.

EIA had also reported that U.S. gasoline supplies rose by 1.9 million barrels in the latest week, while distillate stocks, which include heating oil and diesel, fell by 200,000 barrels. The EIA also reported that demand for motor gasoline has averaged about 9 million barrels a day over the last four weeks, down 2.8% from the same period a year ago. Meanwhile, distillate fuel demand has averaged 4 million barrels a day, down by 2.2%, and jet fuel demand fell 18%.

For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.

Against this background, reformulated gasoline for January delivery ended slightly higher at $1.2096 a gallon. January heating oil fell 2% to $1.7271 a gallon.

January natural gas tumbled 5.4% to $6.51 per million British thermal units.