Modest gains for crude

Crude gains almost 9% for the month of February

Crude prices ended little higher on Wednesday, 29 February 2012 at Nymex. After their early-morning rise, oil futures wavered between small gains and losses and then headed south after Fed Chairman Ben Bernanke's comments to Congress were released and the Energy Information Administration reported on crude supplies.

Light and sweet crude for April delivery rose $0.52 (0.5%) to $107.07 a barrel on the New York Mercantile Exchange on Wednesday. Prices gained 8.7% during February 2012.



In the latest weekly inventory report, the EIA showed today that oil supplies rose 4.2 million barrels in the week ended 24 February 2012. Market had expected an increase of 1 million barrels. The EIA also reported gasoline stocks down 1.6 million barrels on the week and distillates supplies down 2.1 million barrels. Market had expected gasoline inventories to decline 180,000 barrels, and distillates inventories to decline 1.3 million.

Crude also dropped after Fed Chairman Bernanke's prepared remarks for a semiannual FOMC report to the House Financial Services Committee. Bernanke's comments contained no surprise, but they also lacked any kind of reaffirmed commitment to an accommodative monetary policy. Bernanke said that keeping monetary stimulus is warranted but climbing energy costs would likely hike inflation temporarily and that the decline in the nation's jobless rate had been more rapid than expected.

In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.7%. Most of its move has come against the euro. Earlier this morning the European Central Bank disclosed that it recently issued more than $700 billion in three-year loans to the continent's banks.

Among domestic data awaited at Wall Street, the Commerce Department reported that the economy expanded during the fourth quarter at a 3.0% clip, rather than the 2.8% pace posted in the advance report. Separately, the Chicago-area business barometer, which also is known as the Chicago PMI, accelerated to a reading of 64.0% in February from 60.2% in January

Among other traded energy products on Wednesday, March gasoline also flip-flopped through the session, ending up less than 1 cent, or 0.1%, at $3.04 a gallon. March heating oil gave up gains after the EIA report, closing down 4 cents, or 1.1%, at $3.19 a gallon. The front-month contracts for gasoline and heating oil each ended the month higher, by 5.4% and 4.1%, respectively.

Natural-gas futures meanwhile, gained 10 cents, or 3.9%, to end the day at $2.62 per million British thermal units. On the month, futures gained 4.5%.

At the MCX, crude oil for March delivery closed lower by Rs 98 (1.8%) at Rs 5,227/barrel. Natural gas for March delivery closed higher by Rs 3.4 (2.7%) at Rs 128.7.