Crude shoots up

Prices rise as Wells Fargo's result boost sentiments

Good earning forecast from Well Fargo lifted oil prices on Thursday, 09 April, 2009. Prices rose as traders became optimist that current recession has bottomed out and demand for energy will only increase in the coming months.

On Thursday, crude-oil futures for light sweet crude for May delivery closed at $52.24/barrel (higher by $2.86 or 5.8%) on the New York Mercantile Exchange. During intra day trading, it rose to a high of $54. For the 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 68% since then. Year to date, in 2009, crude prices are higher by 14.6%. On a yearly basis, crude prices are lower by 50%.

Today morning, Wells Fargo announced that in its first quarter earnings, it expects to earn $0.55 per share for the quarter against an expected $0.24 per share. Leadership from banks and other financial stocks helped bring about broad-based buying in each of the major indices.

The EIA reported yesterday 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 Thursday, May reformulated gasoline rose 4.14 cents, or 2.9%, to $1.481 a gallon and May heating oil gained 3.06 cents, or 2.2%, to $1.4288 a gallon.

May natural-gas futures fell 2 cents, or 0.6%, to $3.61 per million British thermal units.

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