Crude rises for third straight day

Prices rise as job losses check in less than expected

Crude oil ended higher little higher for third consecutive day on Friday, 08 May, 2009. Prices rose today as job losses in April, 2009 were reported much less than expected. The report increased the chances of faster economic recovery. Prices also rose due to the weak dollar.

On Friday, crude-oil futures for light sweet crude for June delivery closed at $58.63/barrel (higher by $1.92 or 3.4%) on the New York Mercantile Exchange. For the week, crude ended higher by 10.2%.

Crude ended April higher by 2.9%. Previously, March trading ended 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 61% since then. Year to date, in 2009, crude prices are higher by 23.8%. On a yearly basis, crude prices are lower by 40%.

The April employment report was released at 8:30 ET on Friday. The April decline in payrolls of 539,000 was better than the expected decline of 600,000, but still represented bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, compared to the sharp drop in the private sector, including a 149,000 decline in manufacturing and 110,000 in construction. Also on the negative side, several prior months were revised lower, and the unemployment rate jumped to 8.9% from 8.5%, as expected.

Earlier during the week, EIA had reported that crude inventories increased by 600,000 barrels in the week ended 1 May, 2009. Gasoline inventories fell by 200,000 barrels. Market was expecting a buildup of more than 2 million barrels in crude inventories and a 750,000 increase in gasoline inventories. Crude inventories, meanwhile, still remained at the highest level since September 1990.

The report also showed that total petroleum demand over the past four weeks was 7.9% lower than a year ago. EIA also reported U.S. refineries increased their capacity utilization of 85.3%, up from 82.7% a week ago.

Also at the Nymex on Friday, June reformulated gasoline rose 4 cent, or 2.4%, to $1.7055 a gallon and June heating oil added 3.32 cents, or 2.2%, to $1.5184 a gallon.

Natural gas for June delivery rose 23 cents, or 5.6%, to $4.311 per million British thermal units. Natural gas ended the week up 21.6%.

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