Crude shoots up

Prices rise as crude stockpiles show unexpected decline

Crude prices jumped substantially at Nymex on Wednesday, 05 October 011. A better than expected private sector job report coupled with latest weekly inventory of crude and crude stockpiles showing surprise decline for last week pushed up prices.

Light and sweet crude for November delivery rose $4.01 (5.3%) to $79.68 a barrel on the New York Mercantile Exchange on Wednesday. For the month of September, oil futures lost 11%, and for the quarter, crude incurred losses of 17%. It was the worst quarterly performance for crude in almost two years.



In the latest weekly inventory report, EIA reported on Wednesday a decline of 4.7 million barrels in the week ended 30 September as against an expectation of a rise of around 2.5 million barrels. The EIA also reported that gasoline inventories fell 1.1 million barrels, and supplies of distillates, which include heating oil and diesel, decreased by 700,000 barrels.

Among economic data expected for the day, an ADP Employment Change report showed that private payrolls increased by 91,000, which bested the consensus call for an increase of 45,000. The report offers an encouraging preview of the official nonfarm payrolls report which is due the coming Friday.

In another report, ISM said that its services index slipped to a reading of 53% in September from 53.3% in August. Reading above the 50% mark indicate expanding activity, however, and the index also beat a forecast of 52.7%.

Among other energy products on Wednesday, gasoline for November delivery added 8 cents, or 3.3%, to end at $2.57 a gallon. Heating oil for the same month's delivery rose 5 cents, or 2%, to $2.78 a gallon.

At the MCX, crude oil for October delivery closed higher by Rs 122 (3.2%) at Rs 3,916/barrel. Natural gas for November delivery closed at Rs 194, lower by Rs 0.1 (0.5%).