Crude surpasses $70 again

Crude rises as militants attack pipeline in Nigeria

Crude prices at Nymex crossed $70 on Thursday, 25 June, 2009. Prices rose today after militants attacked a key pipeline in Nigeria, the fifth largest oil exporter to the U.S. Prices also rose as energy department's weekly inventory report showed yesterday more than expected drop in crude inventories for last week.

On Thursday, crude-oil futures for light sweet crude for July delivery closed at $70.23/barrel (higher by $1.56 or 2.3%). For the first time crude crossed $70 in a week. Last week, crude ended lower by 3.3%.

Crude had ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 53% since then. Year to date, in 2009, crude prices are higher by 39.8%.

EIA reported yesterday that crude inventories fell 3.8 million barrels in the week ended 19 June, 2009. Market was expecting a decline of 1.2 million barrels. Refiners boosted production in anticipation of higher fuel demand in the summer driving season. U.S. refineries ran at 87.1% of their operable capacity last week.

The government also reported that gasoline inventories increased by 3.9 million barrels last week, more than the buildup of 1 million barrels expected. Distillate inventories rose by 2.1 million barrels last week. Gasoline production stood at 9.2 million barrels a day last week, up 1% from the previous week. Total implied demand for petroleum products over the last four-week period has averaged 18.3 million barrels a day, down by 6.6% compared to the similar period last year

Also at the Nymex on Thursday, July reformulated gasoline rose 5.58 cents, or 3%, to $1.8983 a gallon and July heating oil gained 3.82 cents, or 2.2%, to $1.7763 a gallon.

Natural gas for July delivery gained 8.3 cents, or 2.2%, to $3.844 per million British thermal units. EIA reported today that U.S. natural gas inventories rose 94 billion cubic feet in the week ended 2 July, 2009. Market had expected an increase between 96 billion and 100 billion cubic feet.

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

At the MCX, crude oil for July delivery closed at Rs 3,428/barrel, higher by Rs 93 (2.8%) against previous day's close. Natural gas for July delivery closed at Rs 194.8/mmbtu, higher by Rs 4.6/mmbtu (2.4%).