Crude crawls back higher again

Prices rise as energy department shows increased demand

Crude oil prices ended higher at Nymex on Wednesday, 26 May 2010. Prices rose on the back of stronger than expected economic data. The weekly inventory report showing increased demand for crude products also led to higher crude prices today.

On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $71.51/barrel (higher by $2.76 or 4%). Last week, crude shed 2.2%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 0.3%.

Prices have shed almost 22% since it hit a high of $86.5 during first week of April this year. Prices are also 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.

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

The EIA reported in its weekly inventory report that crude stockpiles showed an increase of 2.4 million barrels in the week ended 21 May against an increase of 100,000 barrels.

The report also showed that gasoline stocks fell 200,000 barrels, while distillates stocks fell 300,000 barrels. The EIA also reported a rise in demand for gasoline and other oil products. Over the last four weeks, gasoline demand was up by 1.2% over the same period last year. Distillate fuel demand in the four-week period rose 16%. Total products supplied over the last four-week period were up 7% compared to last year's.

Among other energy products on Wednesday, gasoline for July delivery added 5 cents, or 2.4%, to finish at $1.96 a gallon.

Natural gas for June delivery rose 10 cents, or 2.6%, to $4.15 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. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for June delivery closed higher by Rs 116 (3.56%) at Rs 3,374/barrel. Natural gas for June delivery closed at Rs 200.9, higher by Rs 4.5 (2.3%).