Crude prices end lower for fourth straight day

Crude pares early gains, as economic data turn weak

Crude oil prices ended lower for fourth straight day on Friday, 17 September 2010 at Nymex. Prices continued to stay weak due to pessimistic economic data. Prices made a strong start but eventually dropped.



On Friday, crude oil futures for light sweet crude for October delivery closed at $73.66/barrel (lower by $0.91 or 1.2%). Oil futures had spent the early part of the session mostly in the black, helped by rising stocks and a weak dollar. For the week, crude ended lower by 3.7%.

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 lower by 0.6%.

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.

In the currency market on Friday, the dollar index, which measures the strength of the dollar against a basket of six other currencies erased earlier losses and climbed up.

Among economic reports expected for the day, The Labor Department in US reported on Friday, 17 September 2010 that the consumer price index increased 0.3% in August, led by higher energy and shelter costs. The increase matched expectations. However, core prices, which exclude volatile food and energy costs were flat, below the 0.1% gain expected. Energy prices increased 2.3% in August, marking the second straight month of 2% plus gains. Food prices rose 0.2%, the largest gain since April.

Separate reports showed that U.S. consumer sentiment fell in September, according to media reports of a survey released by Reuters and the University of Michigan. The UMich index declined to 66.6 in September - the lowest level since August 2009 from 68.9 in August. Market had expected a September reading of 70.

In the latest weekly inventory report, the EIA reported during the week a decrease of 2.5 million barrels of oil in the nation's crude reserves for the week ended 10 September. According to the EIA, the 357 million barrels of crude oil currently in inventory are above average for this time of the year. The report also showed that stockpiles of gasoline declined 700,000 barrels, and inventories of distillates, which include diesel and heating oil, decreased 300,000 barrels during the week.

Among other energy products on Friday, reformulated gasoline for October delivery declined a penny to finish at $1.92 a gallon, a 2.7% weekly decrease. So far this year, however, gasoline futures have lost 8.2%

Also on Friday, natural-gas prices ended 0.9% lower but stayed above $4 per million British thermal units, with the October contract settling at $4.02 per million Btus. Natural-gas prices added 3.5% 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.