Crude ends winning streak

Prices drop as gasoline inventories rise for last week

Crude oil prices ended their four-day winning streak and ended lower on Wednesday, 04 August 2010. Prices dropped as energy department reported build up in gasoline inventories for last week. A strong dollar also led to drop in prices.



On Wednesday, crude oil futures for light sweet crude for September delivery closed at $82.47/barrel (lower by $0.08 or 0.1%). Prices rose to a high of $83.01 during intra day trading. Last week, crude ended marginally higher.

For the month of July, crude ended higher by 4.5%. Before this, in 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 higher by 5%.

In the latest weekly inventory report, the EIA report showed a decline of 2.8 million barrels of crude stockpiles for the week ended 30 July. That compares with an expected decline of about 1.2 million barrels. In addition, the EIA reported gasoline stocks rose 700,000 barrels, which compares with expectations for a decline of around 870,000. Stocks of distillates increased 2.2 million barrels, against an expected rise of 1.2 million.

In the currency market on Wednesday, the dollar index, which tracks the strength of dollar against a basket of six other currencies, rose by 0.4%.

Among the economic data expected for the day, Institute for Supply Management's report on the service sector came in higher than expected. The index rose 54.3 in July, from 53.8 in June.

Among other energy products on Wednesday, gasoline for September delivery settled 2 cents lower, or 0.8%, to $2.18 a gallon. Heating oil, a distillate, for September delivery settled higher by less than a penny to $2.20 a gallon.

Also, on Wednesday, natural gas for September delivery added 10 cents, or 2.1%, to finish at $4.74 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 1 (0.01 %) at Rs 3,796/barrel. Natural gas for August delivery closed at Rs 219.9, higher by Rs 3.9 (1.8%).