Crude gains for first time in four days

Prices give up early losses as stockpiles grow less than expected

Oil prices pared early losses and ended marginally higher on Wednesday, 08 April, 2009. Prices gave up earlier losses after energy department reported that there was less than expected build up in crude inventories. Prices rose today for first time in four days.

On Wednesday, crude-oil futures for light sweet crude for May delivery closed at $49.38/barrel (higher by $0.23 or 0.5%) on the New York Mercantile Exchange. During intra day trading, it dropped to a low of $47.37. Last week, crude ended higher by 0.3%.

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 68% since then. Year to date, in 2009, crude prices are higher by 8.8%. On a yearly basis, crude prices are lower by 50%.

The EIA reported today that crude inventories rose 1.7 million barrels in the week ended 3 April, 2009. Market was expecting a build up to the tune of 2 million barrels. Stockpiles in the U.S., the world's biggest oil consumer, still stood at the highest level in 16 years.

The EIA also reported that gasoline inventories rose 600,000 barrels while distillate stockpiles, which include diesel and heating oil, declined by 3.4 million barrels during the week under review. U.S. refineries operated at 81.8% of their operable capacity last week, up slightly from a week ago. Meanwhile, the EIA also reported petroleum demand over the last four-week period fell 4.4% from a year ago.

Also at the Nymex on Wednesday, May reformulated gasoline rose 1.4% to $1.4396 a gallon and May heating oil gained 0.6% to $1.3982 a gallon.

May natural-gas futures gained 4.6% to $3.562 per million British thermal units.

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

At the MCX, crude oil for March delivery closed at Rs 2,538/barrel, higher by Rs 43 (1.7%) against previous day's close. Natural gas for April delivery closed at Rs 183.1/mmbtu, higher by Rs 2/mmbtu (1.1%).