Crude pares early losses

Prices rise as dollar pares early gains

Crude prices gave up earlier losses and finally ended higher on Wednesday, 05 August, 2009. Prices fell earlier during the day as energy department's weekly inventory report showed more than expected build up in crude inventories for last week. But then crude pared its losses and ended higher as dollar gave up its early morning gains.

On Wednesday, crude-oil futures for light sweet crude for September delivery closed at $71.97/barrel (higher by $0.55 or 0.7%). During intra day trading, it fell to a low of $69.71. Last week, crude ended higher by 2.1%.

For the month of July, 2009, crude ended lower by a marginal 0.6%. 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 44% since then. Year to date, in 2009, crude prices are higher by 49%.

In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose in the early trading hours. It however slipped while the session was nearing its end.

EIA reported today that crude supplies increased 1.7 million barrels to 349.5 million barrels in the week ended 31 July, 2009. Market was expecting a rise of 1.5 million barrels. The Energy Department also said that gasoline stocks fell by 200,000 barrels and distillate inventories dropped by 1.1 million barrels last week.

Also at the Nymex on Wednesday, September reformulated gasoline fell 1 cent to $2.05 a gallon, while September heating oil rose 6 cents to $1.96 a gallon.

September natural gas futures rose 4 cents to $4.04 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 August delivery closed higher by 27 (0.8%) at Rs 3,404/barrel. Natural gas for August delivery closed at Rs 193.3/mmbtu, higher by Rs 4.3/mmbtu (2.3%).