Crude ends losing streak

Price manages to register marginal gains

Crude prices ended their downward journey and managed to register marginal gains at Nymex on Thursday, 09 July, 2009. Prices rose today due to bullish initial claims data from the Labor Department. Prices also managed to rise due to the weak dollar.

On Thursday, crude-oil futures for light sweet crude for August delivery closed at $60.41/barrel (higher by $0.27 or 0.4%). During intra day trading, it fell below $60 earlier. Last week, crude ended lower by 3.5%. In July, crude has shed 13.6% on a m-t-d basis. Prices had gone down by $13 in the past six sessions.

For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 67% since then. Year to date, in 2009, crude prices are higher by 37.2%.

The Labor Department reported on Thursday, 09 July, 2009 that first-time claims for state unemployment benefits fell in the latest weekly data while continuing claims hit a record high. The number of initial claims in the week ending 4 July, 2009 fell 52,000 to 565,000 - the lowest level since January. The level of initial claims is up more than 50% from the same period in the prior year. The four-week average of initial claims fell 10,000 to 606,000.

In the weekly inventory report, EIA reported yesterday that crude inventories fell by 2.9 million barrels in the week ended 3 July, 2009. The drop came as US imported less oil in the week. Imports averaged 9.2 million barrels a day, down 139,000 barrels a day from the previous week. U.S. refineries ran at 86.8% of their operable capacity last week, slightly lower than the previous week's 87%.

EIA had also reported that gasoline inventories rose 1.9 million barrels, while distillate stockpiles increased 3.7 million barrels for last week. Total U.S. petroleum-product inventories rose for a 15th week to 766.9 million barrels, the highest level since 1998.

Earlier during the week, EIA reported in its short-term energy outlook that it expects a smaller decline in global oil consumption this year due to better-than-expected economic activity in Asia. The EIA now projects oil consumption to fall by 1.6 million barrels a day compared with a decline of 1.7 million barrels a day in its June outlook. The price of crude oil is expected to average near $70 per barrel through the second half of 2009.

In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value fell. The euro gained more than 1% against the dollar.

Also at the Nymex on Thursday, August reformulated gasoline rose 3.05, or 1.9%, to $1.6638 a gallon and August heating oil fell slightly to $1.5344 a gallon.

August natural-gas futures climbed 1.6% to $3.408 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 July delivery closed at Rs 2,926/barrel, lower by Rs 77 (2.6%) against previous day's close. Natural gas for July delivery closed at Rs 166/mmbtu, lower by Rs 1.6/mmbtu (0.95%).