Crude pare gains

Prices end marginally higher on hopes of new stimulus

Crude oil prices pared all their earlier losses and ultimately ended higher on Thursday, 22 January, 2009. Prices earlier fell as energy department reported more than expected build up in crude inventories. But prices then took a u turn on anticipation that the new administration will take necessary steps soon to boost the US economy.

On Thursday, crude-oil futures for light sweet crude for March delivery closed at $43.67/barrel (higher by $0.12 or 0.3%) on the New York Mercantile Exchange. Last week, crude prices shed 10.6%.

Prices reached a high of $147 on 11 July but have dropped almost 68% since then. Year to date, in 2009, crude prices are lower by 12.5%. On a yearly basis, crude prices are lower by 52%.

EIA reported today that U.S. crude supplies rose by 6.1 million barrels to stand at 332.7 million barrels during the week ended 16 January, 2009. Market had expected a buildup of 1.9 million barrels. After the data, March crude futures tumbled $2.62, or 6%, to $40.92 a barrel in electronic trading on Globex.

The EIA also reported a rise of 6.5 million barrels in gasoline supplies and a rise of 0.8 million barrels in distillate stocks for the week under review.

Against this background, March reformulated gasoline fell 8 cents to $1.12 a gallon, and March heating oil dropped 3 cents to $1.35 a gallon.

March natural gas futures fell 10 cents to $4.68 per million British thermal units.