Crude pares early losses

Prices end marginally higher as earnings disappoint

Crude oil prices ended marginally higher on Tuesday, 20 July 2010 at Nymex. Prices rose on anticipation that tomorrow's weekly inventory report will show a drop in crude stockpiles for last week. Prices fell earlier in the day due to a couple of disappointing earning and economic reports.



On Tuesday, crude oil futures for light sweet crude for September delivery closed at $77.58/barrel (higher by $0.68 or 0.9%). During intra day trading, prices fell to a low of $76. Last week, prices gained 1.1%.

For the month of June, oil prices shed 2.7%. Crude ended second quarter of CY 2010 lower by 9.3%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 1.4%.

The only economic report scheduled for the day showed a 5% month-over-month decline in housing starts for June. That took starts to an annualized rate of 549,000 units, which is below the annualized rate of 575,000 units that had been widely expected. In contrast, building permits for June increased 2.1% month-over-month to an annualized rate of 586,000, which is above the annualized rate of 572,000 units that had been widely expected.

Companies that disappointed with their earning reports were IBM and Goldman Sachs. Johnson and Johnson too issued a downside forecast though the company's earnings beat expectations.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.3% after rising 0.5% earlier in the day and also dipping in the negative territory in between.

On Tuesday, natural gas for September delivery rose 7 cents, or 1.5%, to settle at just under $4.58 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 August delivery closed higher by Rs 53 (1.5%) at Rs 3,670/barrel. Natural gas for July delivery closed at Rs 213.6, higher by Rs 0.8 (0.4%).