Crude ends with marginal gains

Prices rise as traders anticipate higher demand due to cold weather

Crude prices managed to end with marginal gains on Friday, 17 December 2010 at Nymex. Prices rose as traders anticipated that demand will go up in coming weeks due to further cold weather in the US.



On Friday, crude oil futures for light sweet crude for January delivery closed higher by $0.32 (0.4%) at $88.02/barrel. Crude gained 0.3% for the week. It lost gained 3.2% in November.

For the month of October, crude ended higher by 1.8%. In September, crude prices ended higher by 11.2%. For the third quarter, crude ended higher by 5.7%. Crude had 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 12.4%.

In the currency market on Friday, the dollar index came off its highs as the U.S. trading gold-trading session wound down, and Treasury yields sank.

The Labor Department in US reported on Thursday, 16 December 2010 that The number of people filing for state unemployment benefits for the first time fell to its second lowest level this year. As per the report, initial claims dropped 3,000 to a seasonally adjusted 420,000 last week, marking the third decline in the past four weeks.

The four-week average of new claims also fell, down 5,250 to 422,750. This is the lowest level since the week ended 2 August 2008. The four-week average smoothes out the data to minimize the impact of one-time changes due to weather, strikes or holidays.

In the latest weekly inventory report, the EIA reported earlier during the week that U.S. crude-oil inventories tumbled 9.9 million barrels in the week ended 10 December. Market had anticipated a 2.7-million-barrel decline. The report also detailed that gasoline inventories rose 800,000 barrels versus expectations for a 1.9-million-barrel gain. Distillates inventories, which include heating oil, rose 1.1 million barrels. Forecasts were for a drop of 200,000 barrels in distillates.

Among other energy products on Wednesday, January gasoline rose 1 cent, or 0.6%, to $2.31 a gallon. Heating oil for January delivery gained 2 cents, or 0.6%, to $2.48 a gallon.

Ntural-gas futures also regained ground on Friday, ending above $4. January natural gas ended up 2 cents, or 0.4%, at $4.07 per million British thermal units. Natural gas has lost about 8% this week. On Thursday, the Energy Information Administration increased its estimate of technically recoverable, unproved U.S. shale-gas resources to 827 trillion cubic feet, more than double its estimate of 347 trillion cubic feet back in October.

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.