Crude goes deep down

Prices plunge for second straight day

Crude prices registered substantial drop at Nymex on Thursday, 24 September, 2009. Prices fell on demand concerns, firm dollar and yesterday's energy department's weekly inventory report that showed that crude stockpiles rose last week.

On Thursday, crude-oil futures for light sweet crude for November delivery closed at $65.89/barrel (lower by $3.09 or 4.5%). Earlier during the day, it fell to a low of $65.6/barrel. Last week, crude ended higher by 4%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. 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 62.5% since then. Year to date, in 2009, crude prices are higher by 42.3%.

In the currency market on Thursday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.6%.

The National Association of Realtors in US reported on Thursday, 24 September, 2009 that resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months. Sales fell in three of four regions last month, with only the West showing a small increase of 2.7%.

In the latest weekly inventory report, EIA announced yesterday that crude supplies rose 2.8 million barrels in the week ended 18 September, 2009. Gasoline inventories gained 5.4 million barrels, and distillate stockpiles, which include diesel and heating oil, rose 3 million barrels..

Among other energy products on Thursday, October-reformulated gasoline fell 6.83 cents, or 4%, to $1.6366 a gallon, and October heating oil lost 7.8 cents, or 4.4%, to $1.6814 a gallon.

Also on Thursday, October natural gas ended up 9.5 cents, or 2.5%, at $3.955 per million British thermal units. EIA reported today that U.S. natural gas inventories rose 67 billion cubic feet to 3,525 Bcf in the week ended 18 September, 2009. That's only 20 Bcf away from the record high hit in November, 2007.

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

At the MCX, crude oil for October delivery closed lower by Rs 133 (4%) at Rs 3,202/barrel. Natural gas for October delivery closed higher by Rs 8.1 (3.5%) at Rs 236.2/mmbtu.