Crude crosses $75

Prices rise on output concerns

Crude prices ended substantially higher on Thursday, 03 September 2010 at Nymex. Prices ended higher as a fire at a Mexican oil platform raised concerns about output of crude. Certain economic data also helped crude climb up.



On Thursday, crude oil futures for light sweet crude for October delivery closed at $75.02/barrel (higher by $1.11 or 1.5%). Last week, crude ended higher by 1.8%. Weekly gains came after two weeks of consecutive losses.

For the month of August, crude ended lower by 8.9%. Before this, in July, crude ended higher by 4.5%. 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 almost unchanged.

Oil witnessed its first monthly decline in August since May. The month started well, with prices surpassing $82 a barrel, but soon got derailed as key reports showed the bad times were far from over.

The Labor Department in US reported on Thursday, 02 September 2010 that the number of people applying for unemployment benefits fell by 6,000 to 472,000 in the week ended 28 August. Though the number showed a decline, first-time claims remained at an elevated level.

The four-week average of initial claims, a better gauge of employment trends than the volatile week-to-week number declined 2,500 to 485,500.

Also, the National Association of Realtors reported on Thursday, 02 September 2010 that pending home sales in July rose 5.2% from downwardly revised June levels. The July index came in better than the 1% monthly drop that market had forecast, though sales in July were nonetheless 19.1% below those during the same month in 2009.

On Thursday, reformulated gasoline for October delivery rose 3 cents, or 1.7%, to $1.92 a gallon. That's gasoline highest price in nearly two weeks. Gasoline prices registered a 12% decline in prices in August, which compares to a 3% gain in July.

Also on Thursday, natural gas for October delivery declined a penny, or 0.3%, to $3.75 per million British thermal units. The Energy Information Administration earlier Thursday reported an increase in storage levels within expectations. Natural gas in storage increased 54 billion cubic feet for the week ended 27 August 2010.

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 September delivery closed higher by Rs 1 (0.02%) at Rs 3,491/barrel. Natural gas for September delivery closed at Rs 177.9, higher by Rs 0.3 (0.2%).