Crude sinks

Prices drop as crude inventories show unexpected rise for last week

Crude oil prices ended lower on Wednesday, 21 July 2010 at Nymex. Prices fell as energy department reported a sudden buildup in crude stockpiles for last week while traders had anticipated the report to show a drop. Prices also fell following Fed chairman Ben Bernanke's semi annual comments on the US economy.



On Wednesday, crude oil futures for light sweet crude for September delivery closed at $76.56/barrel (lower by $1.02 or 1.3%). During intra day trading, prices fell to a low of $76.44 and rose to a high of $78.61. 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 2.7%.

In the latest inventory report, the EIA reported today a rise of 400,000 barrels of oil for last week, although a sizeable decrease had been widely expected. The report also showed that gasoline inventories rose 1.1 million barrels and stockpiles of distillates, which include diesel and heating oil, rose 3.9 million barrels. Market had expected an increase of 1 million for gasoline stocks and 1.6 million for distillate stocks.

Fed Chairman Bernanke, made his semiannual monetary policy report to the Senate Banking Committee this afternoon. Bernanke spoke of continued uncertainty in the economy and made note of the Fed's preparations to take more policy actions as needed.

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 0.6%.

Among other energy products on Wednesday, reformulated gasoline for September delivery, the most active contract, fell to $2.06 a gallon from a previous settlement of nearly $2.08 a gallon. September heating oil, also the most active contract, declined more than 3 cents, or 1.7%, to just below $2.02 a gallon.

On Wednesday, natural-gas futures for September delivery settled down nearly 8 cents, or 1.7%, at $4.50 per million British thermal units. The EIA is scheduled to report on natural-gas inventories on Thursday morning.

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 lower by Rs 27 (0.7%) at Rs 3,643/barrel. Natural gas for July delivery closed at Rs 213.4, lower by Rs 0.2 (0.09%).