Crude shoots up

Strong housing report increases hopes of global recovery

Crude oil prices rose substantially higher on Wednesday, 27 May 2009. Prices rose on hopes of global economic recovery.

On Wednesday, crude-oil futures for light sweet crude for June delivery closed at $63.45/barrel (higher by $1 or 1.6%). Last week, crude ended higher by 8.2%.

Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 52% since then. Year to date, in 2009, crude prices are higher by 31.3%. On a yearly basis, crude prices are lower by 45%.

In its latest annual report, EIA reported on international outlook for energy that global oil demand will grow to 91 million barrels a day in 2015 and 107 million barrels a day in 2030. Global oil supply will rise to 106.6 million barrels a day by 2030. The EIA also said natural-gas consumption will increase to 153 trillion cubic feet in 2030. The Energy Information Administration predicted in a newly released report that oil prices will rise to $110 in 2015 and $130 in 2030.

The Federal Agency reported on Wednesday, 27 May, that home prices fell 0.5% in the first quarter of the year, a much smaller pace of decline than in the final three months of 2008. It was down 7.3% in the past year. The FHFA price index measures sales of the same homes over time, and is therefore not influenced by a different mix of homes sold in a period as the median sales price is.

Also at the Nymex on Wednesday, June-reformulated gasoline rose 3.39 cents, or 2.1%, to $1.8917 a gallon, while June heating oil gained 1.64 cents, or 1.1%, to $1.5617 a gallon.

Natural gas for June delivery rose slightly to $3.537 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for June delivery closed at Rs 3,017/barrel, higher by Rs 75 (2.5%) against previous day's close. Natural gas for June delivery closed at Rs 173.8/mmbtu, higher by Rs 1.2/mmbtu (0.7%)