Crude ends mildly higher

Prices pare most of earlier gains as inventories rise less than expected

Crude prices ended mildly higher on Wednesday, 08 February 2012 at Nymex. Prices ended little higher as energy department reported much less than expected rise in crude inventories for last week in the latest weekly inventory report. It pared most of its early gains it had mustered earlier during the day. A strong dollar also led prices give up earlier gains.

Light and sweet crude for March delivery rose $0.30 (0.3%) to $98.71 a barrel on the New York Mercantile Exchange on Wednesday. Prices rose to a high of $100.09 and fell to a low of $98.17 during intra day trading. Prices fell 1.7% last week. Prices fell 0.4% for the month of January.



In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.15%.

In the latest weekly inventory report, the EIA reported an increase of 300,000 barrels in crude supplies for the week ended 3 February 2012. That contrasted with expectations of an increase of 2.25 million barrels. The EIA also said gasoline supplies increased 1.6 million barrels on the week, with an increase in distillates, which include heating oil, pegged at 1.2 million barrels. Market had expected gasoline inventories to have risen by 1.25 million barrels and distillates to have declined 200,000 barrels.

In Athens, Greek Prime Minister Lucas Papademos met with other political leaders after twice postponing the meeting in striving to finalize a second round of rescue funds. The ECB is ready to exchange its holdings of Greek government bonds to help reduce Greek's debt load. A debt- restructuring deal between the Greek government and the private sector had been reported as very close to being agreed upon. But reports indicate that issues with the European Central Bank may at least temporarily block any Greek debt-restructuring agreement.

The major equity averages at Wall Street mustered modest gains in the early going, but the move proved unsustainable. As sellers applied pressure each of the three major indices slipped into the red but managed to end the day with minor gains.

Among other traded energy products on Wednesday, March gasoline futures rose 5 cents, or 1.6%, to $2.98 a gallon. March heating oil lost less than 1 cent to $3.19 a gallon.

March natural gas ended 2 cents lower, or 1%, to $2.45 per million British thermal units.

At the MCX, crude oil for February delivery closed higher by Rs 17 (0.34%) at Rs 4,875/barrel. Natural gas for February delivery closed at Rs 123, higher by Rs 0.9 (0.7%).