Crude ends above $85 mark for second straight day

Economic data and weak dollar push up prices

Crude oil ended higher at Nymex on Friday, 30 April 2010. Economic data and weak dollar pushed up prices and the same ended above the $85 mark for the second straight day.

On Friday, crude-oil futures for light sweet crude for June delivery closed at $86.15/barrel (higher by $0.98 or 1.15%). A day earlier, prices crossed $85 mark, for the first time in a week. For the week, crude ended higher by 1.2%. 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 higher by 8.3%.

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 Friday, the dollar index, which measures the strength of the dollar against basket of six other currencies initially fell by 0.3%. The dollar still finished the week with a 0.6% gain, which puts it up 0.5% for the month and up some 5% for the year.

Stiff selling at Wall Street on Friday resulted in the stock market's worst weekly loss since January and marked a weak finish to April. Still, the stock market was able to book its third straight monthly gain. The early tone of trade was tepid as market participants made little response to news that the first quarter GDP hit an annualized rate of 3.2%. The headline number was essentially on par with the 3.3% increase that had been widely expected.

Separately, the Reuters/University of Michigan consumer sentiment index showed that U.S. consumer sentiment improved marginally in late April after sinking earlier in the month. The index rose to 72.2 from 69.5 in mid-April. Market had expected an increase to about 71. March's final reading was 73.6. The index has been largely unchanged since November, remaining at depressed levels.

Earlier during the week, in the latest weekly inventory report, the Energy Department reported an increase of 1.96 million barrels in the U.S. oil inventories in the week ended 23 April. Market had expected a rise of 1.4 million barrels. Refineries ran at 89% of their capacity, higher than expected. Crude stocks in Cushing, Okla., the delivery point for New York Mercantile Exchange oil, increased by nearly half a million barrels.

The report also showed that gasoline stocks declined by 1.24 million barrels; against an expected build of 500,000 barrels. Stocks of distillates, which include heating oil and diesel, were up by 2.93 million barrels when the expectation was of an increase of 1.2 million barrels.

On Friday, nnatural gas extended its slide from the prior session. The steady selling pressure sent contract prices 1.7% lower to $3.91 per MMBtu. Natural-gas futures dropped more than 8% on Thursday as government reports showed an increase in weekly inventories as well as February output.

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.