Crude pares earlier losses to end marginally higher

Hurricane Irene raises concerns about a slowdown in refinery production

Crude prices ended marginally higher on Thursday, 25 August 2011 at Nymex. Prices traded lower for most part of the day after the dollar rose and US equities slumped. It pared its losses in the later part of the day as Hurricane Irene fed concerns about a slowdown in refinery production on the East Coast.



On Thursday, crude oil futures for light sweet crude for September delivery closed higher by $0.14 (0.2%) at $85.3/barrel. Earlier, prices fell to a low of $83.01 during intra day trading. Last week, crude lost 3.7%.

Markets are waiting to hear from Federal Reserve Chairman Ben Bernanke, who is scheduled to speak at a gathering of central bankers in Jackson Hole, on Friday.

US stocks pared earlier gains and slumped on Thursday. Latest initial claims data showed that the number of Americans seeking new jobless benefits rose for the second week in a row as thousands of phone workers at Verizon Communications filed claims. New applications for U.S. unemployment compensation rose 5,000 to 417,000. Market had expected new requests for jobless benefits to total 410,000 in the week of 20 August on a seasonally adjusted basis. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by 0.5%.

In the latest weekly inventory report, the EIA reported yesterday a decline of 2.2 million barrels of crude stockpiles in the week ended 19 August. The EIA also said gasoline stockpiles increased 1.4 million barrels, and stockpiles of distillates 1.7 million barrels higher. Market expected crude inventories to have risen 2 million barrels last week. Gasoline inventories was expected to have dropped around 1.3 million barrels while distillates were expected to have risen 1.4 million barrels for last week.

Among other energy products on Thursday, September gasoline was up 9 cents, or 3.1%, to $2.97 a gallon. Heating oil for the same month's delivery rose 2 cents, or 0.8%, to $2.99 per gallon.

Natural gas added to earlier gains after the Energy Information Administration reported an increase in natural-gas inventories on the lower end of expectations. Natural gas for September delivery added 2 cents, or 0.4%, to end at $3.91 per million British thermal units. The EIA reported a rise of 73 billion cubic feet in natural-gas supplies for the week ended 19 August 2011. Market had expected an increase between 72 billion and 76 billion cubic feet.

At the MCX, crude oil for August delivery closed lower by Rs 12 (0.3%) at Rs 3,950/barrel. Natural gas for August delivery closed at Rs 181.1, higher by Rs 0.3 (0.16%).