Crude closes above $82

Prices rise on demand hopes and less than expected buildup in crude supplies

Crude prices ended higher on Wednesday, 10 March 2010. Prices closed above $82. Prices rose as crude supplies rose less than expected for last week and due to anticipation of higher demand in the coming months.

On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $82.09/barrel (higher by $0.60 or 0.7%). Prices rose to a high of $83.12 during intra day trading. Prices gained 2% last week.

Crude prices rose 9.3% in February as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar. Prices have ranged between $69 and $84 a barrel since October. Crude has risen 72.7% in last one year.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.3%.

In the latest weekly inventory report, the EIA reported today that crude-oil supplies were up 1.4 million barrels in the week ended 5 March as against an expected figure of 2.1 million barrels. The EIA also reported a drop of 2.9 million barrels in gasoline stocks and a drop of 2.2 million barrels in supplies of distillates, which include heating oil.

In the latest report, OPEC reported today that it now expects world oil demand to grow by 900,000 barrels a day in 2010. This represents an upward revision of 100,000 barrels a day from the previous assessment.

Yesterday, in the latest monthly report, the EIA had reported that it now expects oil consumption growth of 1.5 million barrels a day this year, up from 1.2 million barrels a day in last month's outlook. As per the report, with that demand, oil prices should stabilize above $80 a barrel. The report also detailed that with this, price of crude oil is to average above $80 a barrel this spring, then rise to about $82 a barrel by the end of the year. Crude should climb to $85 a barrel by the end of 2011.

Among other energy products on Wednesday, gasoline for April delivery finished up 3 cents at $2.29 a gallon, while heating oil for the same month rose 3.1 cents to $2.12 a gallon.

Also on Wednesday, April natural gas rose 4.4 cents to $4.56 per million British thermal units.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 45% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for February delivery closed Rs 32 (0.9%) higher at Rs 3,757/barrel. Natural gas for March delivery closed at Rs 206/mmbtu, lower by Rs 0.5 (0.18%).