Crude ends marginally higher

Prices reverse course in the final minutes of trading

Crude oil prices ended marginally higher at Nymex on Thursday, 22 April 2010 after trading lower almost the entire day. Prices reversed course during the last moment as dollar surrendered its gains partly. Prices dropped earlier due to a host of factors. First was the strong dollar. Next came demand concerns and lastly traders continued to mull over yesterday's energy department's report of unexpected rise in crude and gasoline inventories for last week. Better than expected earning reports at Wall Street tried to curtail crude's losses.

On Thursday, crude-oil futures for light sweet crude for June delivery closed at $83.70/barrel (higher by $0.2 or 0.2%). During intra day trading, crude fell to a low of $81.73. Last week, crude ended lower by 1.2%. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 4.4%.

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 155% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.5%. The greenback rose for the sixth straight session against a basket of major currencies, including the euro, after the European Union said that Greece's budget deficit was wider than forecast.

Among economic reports expected for the day, The Labor Department in US reported on Thursday, 22 April 2010 that U.S. wholesale prices rose by a seasonally adjusted 0.7% in March 2010, reversing a drop in February. The producer price index has risen by 6% in the past year, led by a 23% rise in energy prices. It's the largest year-over-year gain since September 2008.

Separately, the Labor Department in US reported on Thursday, 22 April 2010 that the number of people filing an initial claim for unemployment benefits declined by 24,000 for the week ended 16 April week to a seasonally adjusted 456,000, the first drop in three weeks. Initial claims are down 27% from a year ago.

Elsewhere, The National Association of Realtors in US reported on Thursday, 22 April 2010 that existing homes rose 6.8% in March to a seasonally adjusted annual rate of 5.35 million from a downwardly revised 5.01 million in February. The figure was more than the expected 5.29 million.

A day earlier, on Wednesday, EIA reported larger-than-expected jumps in oil and gasoline inventories for last week. The report detailed that crude oil inventories rose 1.9 million barrels in the week ended 16 April. Gasoline stockpiles rose 3.6 million barrels versus expectations of a 100,000-barrel gain. Distillate stockpiles added 2.1 million barrels, also above expectations of 840,000 barrels.

On Thursday, natural-gas futures finished 4.4% higher. Natural gas for May delivery rose 17 cents to $4.12 per million British thermal units. Natural gas for June delivery, the most active contract, also rose 17 cents, or 4.3%, to settle at $4.2150 per million BTUs. The Energy Information Administration on Thursday reported an increase of 73 billion cubic feet of the product to the nation's stockpiles, a smaller-than-expected rise. The build was over the 33 billion cubic feet five-year average, however.

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

At the MCX, crude oil for May delivery closed lower by Rs 8 (0.21%) at Rs 3,732/barrel. Natural gas for April delivery closed at Rs 183.8/mmbtu, higher by Rs 5.7 (3.2%).