Crude futures soar as data shows unexpected decline in crude inventories
Crude oil futures rose today for the third consecutive day and closed above $83/barrel. Prices rose for the first time this month after an Energy Department report showed an unexpected decline in U.S. inventories.
For the day ending Thursday, 11October, 2007, crude-oil futures for light sweet crude for November delivery closed at $83.08/barrel (higher by $1.78/barrel or 2.2%) on the New York Mercantile Exchange. Futures reached $83.67 during intra day trading.
As per the weekly inventory report by the Energy Department, stockpiles fell 1.67 million barrels in the week ended 5 October. At 320.1 million barrels, U.S. crude-oil inventories are still above the upper end of the average range for this time of year. Refinery activity rose to 87.8% from 87.5% the previous week.
The data also showed motor gasoline inventories rose by 1.7 million barrels last week. Distillate fuel supplies (which include heating oil) fell by a larger-than-expected 600,000 barrels.
Brent crude oil for November settlement rose $1.55 (2%) to $80.15 a barrel on the London-based ICE Futures Europe exchange.
OPEC has said previously that a falling dollar justified higher prices because oil- producing countries sell crude oil in dollars and often buy goods in euros.
Heating oil futures touch all-time high during intra day trading
November natural gas fell 13.4 cents to settle at $6.876 per million British thermal units. The Energy Department also released the report on natural-gas supplies. Natural-gas inventories rose by 73 billion cubic feet for the week ended 5 October. Total stocks now stand at 3.336 trillion cubic feet, down 44 billion cubic feet from the year-ago level, but 237 billion cubic feet above the five-year average.
Against this backdrop, gasoline for November delivery climbed 3.3 cents (1.6%) to settle at $2.0666 a gallon. Heating oil for November delivery increased 3.01 cents (1.4%) to close at $2.2473 a gallon in New York. Futures touched $2.2711 during intra day trading, the highest since 1978.
At the MCX, crude oil for October delivery closed at Rs 3269/barrel, higher by Rs 106 (3.3%) against previous day’s close. Natural gas closed at Rs 273.4/mmtbu as against previous close of Rs 275.2/mmtbu.
OPEC planned to boost daily oil production by 500,000 barrels. OPEC's production target is 27.2 million barrels a day, beginning 1 Nov. OPEC, has decided to raise their daily output by 500,000 barrels per day, starting 1 November.
Attacks on oil facilities in Nigeria have curtailed shipments and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.