Crude ends lower

Prices drop as inventories rise more than expected

Oil prices ended lower on Wednesday, 30 March 2011 at Nymex. Prices dropped as energy department reported more than expected build up in crude inventories for last week. A strong dollar also impacted prices.



On Wednesday, crude oil futures for light sweet crude for April delivery closed lower by $0.52 (0.5%) at $104.27/barrel. Earlier prices traded as low as $103.44. Last week, prices closed higher by 4.2%.

Crude prices gained 5.2% in February 2011 after gaining 0.9% in January.

In the latest weekly inventory report, the EIA reported that inventories of crude rose 2.9 million barrels during last week. Market had expected an increase around 2.1 million barrels. The EIA also reported gasoline inventories declined 2.7 million barrels, compared to expectations of a decline around 1.5 million barrels. Distillates stockpiles increased 700,000 barrels, against expectations of a decline of 1.4 million barrels.

In the currency market on Wednesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.2%. But the dollar fell against the euro after a European Central Bank board member's comments suggested the ECB could raise rates earlier than some expected.

Among other developments across the world, violence continued as forces loyal to Libyan leader Moammar Gadhafi waged counterattacks, reversing some recent gains by rebels.

Among economic data expected for the day, The ADP report showed that U.S. private-sector companies added 201,000 jobs in March. Since the number was on par with what had been expected, participants had only a muted response.

Among other energy products on Wednesday, gasoline for April delivery, a contract that expires later this week, adding 2 cents, or 0.6%, to settle at $3.06 a gallon. The most-active May contract added 1 cent to end at $3.06 a gallon.

Natural gas for May delivery, the front-month contract, rose 9 cents, or 2.1%, to $4.36 per million British thermal units.

At the MCX, crude oil for April closed lower by Rs 8 (0.2%) at Rs 4,689/barrel. Natural gas for April delivery closed higher by Rs 0.9 (0.5%) at Rs 195.7.