Crude moves down

Healthy weekly gains for crude

Crude oil prices ended substantially lower on Friday, 11 June 2010 at Nymex. Prices fell due to weaker than expected retail sales data at Wall Street. Nevertheless, prices registered healthy weekly gains.



On Friday, crude-oil futures for light sweet crude for July delivery closed at $73.78/barrel (lower by $1.7 or 2.3%). For the week, prices gained 3.1%.

For the month of May, crude shed 14%. It was the biggest monthly drop for crude since December 2008. 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 5%.

The Commerce Department in US reported on Friday, 11 June 2010 that U.S. retail sales declined for the first time in eight months in May, tumbling a surprising 1.2%. The declines were led at hardware stores, auto dealers, gas stations, department stores and clothing stores. Market was expecting a 0.2% gain in sales. It was the first decline in sales since September 2009.

Separately, The Reuters/University of Michigan in US reported on Friday, 11 June 2010 that U.S. consumer sentiment rose in early June, hitting the highest level since January 2008. According to the sentiment data, consumers' expectations rose to 70.7 in June from 68.8 in May, while their view of current conditions rose to 82.9 from 81.

In the currency market on Friday, the dollar stayed strong for almost the entire day. The dollar index gained by almost 0.3%. The euro fell as much as 0.7% against the dollar after rallying the previous three sessions. The euro has plunged 16% this year.

The EIA reported earlier during the week that the nation's oil stockpiles fell 1.8 million barrels in the week ended 4 June. The figure was much more than expected. Refineries operated at 89.1% of their capacity. Gasoline inventories were unchanged from last week, while distillate stockpiles increased by 1.8 million barrels. Data on gasoline also were relatively bearish as markets were expecting a decline around 500,000 barrels. The distillates increase came in larger than expected and above the five-year average gain for the period.

Organization of the Petroleum Exporting Countries released its monthly oil-market report during the week. The OPEC expects demand to increase by 950,000 barrels a day this year, but cautioned that an expected moderation in the pace of the economic recovery is likely to impact demand growth forecasts for the second half of 2010. OPEC also cut its supply forecast as production from non-OPEC countries increased by 110,000 barrels a day from the last month. The cartel's oil-reference basket fell below $67 a barrel in late May, its lowest level since early October 2009

On Friday, among other energy related products, reformulated gasoline for July delivery lost 2 cents, or 1%, to $2.05 a gallon. Heating oil for July delivery receded 3 cents, or 1.4%, to $2 a gallon

On Friday, natural gas for July delivery added 13 cents, or 2.8%, to $4.78 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 41 (1.2%) at Rs 3,544/barrel. Natural gas for June delivery closed at Rs 218.4, lower by Rs 2.4 (1.08%).