Weak economic data pulls down crude

Prices drop for third straight day

Crude oil prices ended lower for third straight day on Friday, 06 August 2010. Prices dropped in tandem with US stocks after non-farm payroll data disappointed traders today.



On Friday, crude oil futures for light sweet crude for September delivery closed at $80.7/barrel (lower by $1.31 or 1.6%). For the week, crude ended higher by 2.2%.

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 2.9%.

Among the economic data expected for the day, The Labor Department in US reported on Friday, 06 August 2010 that total nonfarm payrolls fell by a seasonally adjusted 131,000 in July 2010. The nation's unemployment rate held steady at 9.5%.

But all the lost jobs were temporary jobs at the U.S. Census. Private-sector payrolls rose by an estimated 71,000 in July. The increase in private payrolls was weaker than the 100,000 increase that had been expected by Wall Street. It showed that U.S. employers continued to hire but at a sluggish pace adding to pessimism about the economic outlook.

In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.5%.

In the latest weekly inventory report, the EIA report during the week 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.

On Friday, natural gas posted another day of steep losses, down 2.9% to $4.47 per million British thermal units, the product's lowest close in three weeks. Natural gas lost 9.1% this week

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 82 (2.2%) at Rs 3,713/barrel. Natural gas for August delivery closed at Rs 208.1, lower by Rs 5.3 (2.5%).