Crude acquires little gains

Prices rise as jobless claims data in US check in better than expected

Crude oil rose on Thursday, 16 April, 2009 after jobless data in US showed that the rate of layoffs have decreased a bit in the last week. This increased overall optimism about the current economic scenario in the market and prices rose today.

Energy department had reported yesterday that crude inventories rose more than expected for the week ended 10 April, 2009. Earlier during the week, the International Energy Agency had lowered its forecast for this year's global oil demand.

On Thursday, crude-oil futures for light sweet crude for May delivery closed at $49.98/barrel (higher by $0.73 or 1.5%) on the New York Mercantile Exchange. During intra day trading, prices rose to a high of $50.48 and also fell to a low of $49.11. Last week, crude ended lower by 0.5%.

Crude ended March trading up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 70% since then. Year to date, in 2009, crude prices are higher by 12.9%. On a yearly basis, crude prices are lower by 51%.

The Labor Department reported today that initial claims for the week ending 11 April totaled 610,000, which is down more than expected from the prior week, but continuing claims climbed more than expected to a new record of 6.02 million. The latest jobless claims data suggested that the pace of layoffs is slowing, but that it isn't getting any easier to find work.

The EIA had reported yesterday that crude inventories rose 5.6 million barrels in the week ended 10 April, 2009. Market was expecting an increase of 2.5 million barrels. At 366.7 million barrels, U.S. inventories stood at the highest level since September 1990.

EIA also reported that gasoline inventories fell by 900,000 barrels last week, as refineries reduced production, and distillate stockpiles, which include diesel and heating oil, fell by 1.2 million barrels. U.S. refineries operated at 80.4% of their operable capacity, the lowest level since September 2008. Meanwhile, total petroleum demand over the past four weeks fell by 5.2% from a year ago.

Paris based IEA reported earlier during the week that it is cutting its demand projection by 1 million barrels a day. After the latest revision, global oil demand this year is now forecast at 83.4 million barrels a day, which is 2.4 million barrels a day below the 2008 level.

Also at the Nymex on Thursday, May reformulated gasoline rose 2.75 cents, or 1.9%, to $1.4743 a gallon and May heating oil gained 2.08 cents, or 1.5%, to $1.4218 a gallon.

May natural-gas futures fell 9.4 cents, or 2.5%, to $3.599 per million British thermal units. EIA reported today that U.S. natural-gas inventories rose 21 billion cubic feet in the week ended 10 April, 2009. At 1,695 billion cubic feet, stocks were 438 billion cubic feet higher than they were last year at this time and 311 billion cubic feet above the five-year average.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for May delivery closed at Rs 2,601/barrel, higher by Rs 13 (0.5%) against previous day's close. Natural gas for April delivery closed at Rs 179.3/mmbtu, lower by Rs 4.2/mmbtu (2.3%).