Crude drops little again

Prices drop due to the rebounding dollar

Crude prices ended little lower at Nymex on Friday, 23 October, 2009. Prices fell due to the rebounding dollar. But still, prices managed to register decent weekly gains.

On Friday, crude-oil futures for light sweet crude for December delivery closed at $81.19/barrel (lower by $0.65 or 0.8%). Earlier during the day, it rose to a high of $81.78. For the week, crude ended higher by 3.4%. In the past two weeks, crude has climbed up by almost 20%.

For the month of September, 2009, crude ended higher by a marginal 0.9%. For the third quarter, crude ended higher by just 1%. Crude prices had rallied 40% and 11.3% in the second and first quarter of 2009 respectively.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55.7% since then. Year to date, in 2009, crude prices are higher by 60%.

EIA reported during the week that crude inventories rose 1.3 million barrels in the week ended 16 October. Market was expecting a buildup figure to the tune of 2.2 million barrels. Imports fell to 8.7 million barrels a day in the latest week. The EIA also reported that petroleum demand remained weak, with demand for gasoline falling to the lowest level in more than five months.

The report also stated that gasoline inventory declined by 2.3 million barrels and the decline was 800,000 barrels for distillates, which include heating oil and diesel.

In the currency market on Friday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies rose by almost 0.4%. Earlier during the week, it had dropped to fourteen month lows.

Among other energy related products, November gasoline slid slightly to $2.0438 a gallon, and November heating oil fell 1.9 cents, or 0.9%, to $2.0756 a gallon.

Also on Friday, November natural gas lost 16 cents, or 3.2%, to $4.787 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 November delivery closed lower by Rs 22 (0.6%) at Rs 3,759/barrel. Natural gas for October delivery closed lower by Rs 12.6 (5.24%) at Rs 230.5/mmbtu.