Crude gains more than 7% for the week

Prices rise on signs of green shoots in the economy

Crude prices ended higher once again on Friday, 24 July, 2009. Prices continued to rise boosted by positive earning reports that literally almost confirmed that “green shoots” in the economy are really being visible.

On Friday, crude-oil futures for light sweet crude for September delivery closed at $68.05/barrel (higher by $0.89 or 1.3%). Trading was quite volatile during the week. Earlier during the week, it fell to a low of $66.46. For the week, crude ended higher by 7.1%.

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 53% since then. In July, 2009, it has dropped by 3.3% till date. Year to date, in 2009, crude prices are higher by 43%.

Among economic reports for the day on Friday, University of Michigan and Reuters reported that U.S. consumer sentiment rose in late July to 66.0 from 64.6 in early July, but this was still down from the June reading of 70.8.

On that day, U.S. stocks mostly reversed their earlier losses, continuing the two-week rally that had sent the Dow Jones Industrial Average back above 9,000 for the first time since January a day before.

EIA reported earlier during the week that total inventories of crude, gasoline and other petroleum products rose 1.9 million barrels in the week ended 17 July, 2009 to 1,117.6 million barrels, up for a sixth straight week to the highest level since September 1990. But crude oil inventories fell last week as the U.S. imported less oil, but inventories gains in gasoline and other products were more than the drop in crude. Meanwhile, petroleum demand rose slightly, but still stayed way below last year's level.

The report also said that crude oil inventories fell by 1.8 million barrels last week. Gasoline inventories rose by 800,000 barrels and distillate stockpiles, which include diesel and heating oil, increased by 1.2 million barrels.

Also at the Nymex on Friday, August reformulated gasoline rose slightly to end at $1.9159 a gallon and August heating oil added 1% to $1.7813 a gallon.

August natural-gas futures rose 14.5 cents, or 41%, to $3.695 per million British thermal units.

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