Crude shoots up

Prices rise as crude inventory registers less thane expected buildup

Crude prices ended substantially higher at Nymex on Wednesday, 21 October, 2009. Prices rose as energy department today reported les thane expected buildup in crude inventories for last week. The slipping dollar also aided to crude's rise.

On Wednesday, crude-oil futures for light sweet crude for December delivery closed at $81.37/barrel (higher by $2.25 or 2.8%). Earlier during the day, it rose to a high of $82. Last week, crude ended higher by 9.4%, the biggest weekly gain in two months. In the past two weeks, crude has climbed up by almost 18%.

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 55.8% since then. Year to date, in 2009, crude prices are higher by 60%.

EIA reported today 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 Wednesday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies fell by almost 0.8%.

Among other energy related products, November motor gasoline rose 6.66 cents, or 3.4%, to $2.0543 a gallon, and November heating oil added 5.8 cents, or 2.8%, to $2.1053 a gallon.

Also on Wednesday, November natural gas ended down 6.1 cents, or 1.2%, to $5.1 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 higher by Rs 114 (3.1%) at Rs 3,781/barrel. Natural gas for October delivery closed higher by Rs 3 (1.24%) at Rs 243.1/mmbtu.