Strong data fails to push up crude

Prices register weekly loss of 0.8%

Despite a better than expected job report, crude prices ended lower on Friday, 03 September 2010 at Nymex. Prices ended lower even though dollar weakened and economic reports checked in better than expected.



On Friday, crude oil futures for light sweet crude for October delivery closed at $74.6/barrel (lower by $0.42 or 0.6%). For the week, crude ended lower by 0.8%.

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 Friday, 03 September 2010 that the U.S. economy shed 54,000 nonfarm jobs in August, much smaller than an expected figure of 1,00,000. The unemployment rate ticked higher to 9.6% in August from 9.5% in the previous month.

Separately, the Institute for Supply Management in US reported on Friday, 03 September 2010 that growth slowed in the U.S. non-manufacturing sector in August, with a key index hitting 51.5%, compared with 54.3% in July. Market had expected a reading of 53.5%. A reading above 50% indicates expansion, while a reading below 50% indicates a contraction.

On Friday, reformulated gasoline for October delivery lost less than a penny, or 0.1%, to $1.92 a gallon on Friday. That represented a 1.6% decline for gasoline this week.

Also on Friday, natural gas for October delivery added 19 cents, or 5%, to $3.94 per million British thermal units. That pushed weekly gains to 8%. The weekly advance didn't make up for the previous week's loss of 11%.

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.