Crude fails to pare all of its intra day losses

Prices trade between $103.78 and $106.18 a barrel

Crude prices partially pared its early weakness but still ended lower on Thursday, 15 March 2012 at Nymex. Prices dropped despite a weak dollar and the weekly inventory report showing smaller than expected rise in crude supplies for last week in yesterday's report. Prices pared intra day losses partly due to mixed economic data.

Light and sweet crude for April delivery fell $0.32 (0.3%) to $105.11 a barrel on the New York Mercantile Exchange on Thursday. The contract had traded as low as $103.78 and as high as $106.18 a barrel. Prices advanced 0.7% last week. Prices gained 8.7% during February 2012.



Among economic data expected for the day, The Labor Department reported first-time claims for jobless benefits fell by 14,000 to 351,000 last week, returning to a four-year low. The New York Federal Reserve's gauge of manufacturing in the region in March climbed to 20.2 from 19.5 the month before, reaching a 21-month high in the most recent reading. In a separate report, the Federal Reserve Bank of Philadelphia's business-condition index rose to 12.5 in March from 10.2 last month.

The latest weekly inventory report showed yesterday that the crude supplies rose by 1.8 million barrels in the week ended 9 March 2012. Market had expected an increase of 2.1 million barrels. The EIA also said gasoline stockpiles decreased by 1.4 million barrels and inventories of distillates declined by 4.7 million barrels. Market had expected a decline of 1.4 million barrels for gasoline supplies and a decrease of 1.5 million barrels for distillates. Prices were trading higher initially following the report.

In the currency market on Thursday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.45%.

In its monthly oil report released on Wednesday, the IEA said it expects global oil demand to grow 0.9% in 2012, unchanged from the agency's previous outlook. But the IEA warned the economic backdrop and high oil prices “restrain any upside momentum for consumption.” The agency projects global daily demand of 89.9 million barrels in 2012. The report also showed that global oil supply fell 200,000 barrels a day in February, with the highest output level for members of the Organization of the Petroleum Exporting Countries since 2008 only partly offsetting a decline from non-OPEC countries.

Among other traded energy products on Thursday, April gasoline futures fell 6 cents, or 1.8%, to $3.29 a gallon. April heating oil declined 4 cents, or 1.2%, to $3.22 a gallon.

April natural-gas futures rose to as high as $2.33 per million British thermal units before pulling back to end at $2.28, down less than a penny, or 0.2%. The Energy Information Administration reported a decline of 64 billion cubic feet in supplies in the week ended 9 March. Market had expected the report to show a decline between 56 bcf and 60 bcf for the week ended 9 March.

At the MCX, crude oil for March delivery closed lower by Rs 47 (0.9%) at Rs 5,294/barrel. Natural gas for March delivery closed lower by Rs 1.2 (1.02%) at Rs 115.5.