Crude oil rises

Prices end their losing streak as crude inventories drop

Crude prices shot up on Wednesday, 15 July, 2009 as the dollar weakened and energy department reported drop in crude inventories for last week.

On Wednesday, crude-oil futures for light sweet crude for August delivery closed at $61.54/barrel (higher by $2.02 or 3.4%). Last week, crude ended lower by 10.3%.

For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63% since then. In July, 2009, it has dropped by 12% till date. Year to date, in 2009, crude prices are higher by 39%.

EIA reported today that U.S. crude inventories fell 2.8 million barrels in the week ended Friday, 10 July, 2009. The drawdown in crude inventories came as crude-oil inputs in U.S. refineries rose to 15.105 million barrels a day last week, the highest level since late August. Refiners' utilization rate rose to 87.9%.

EIA also reported that gasoline inventories rose 1.5 million barrels, while distillate stockpiles, which include diesel and heating oil, rose 600,000 barrels. Demand for petroleum products, however, remained weak, pushing total petroleum product inventories to 771.6 million barrels last week, up 4.6 million barrels from a week ago. That's the highest level since September 1998.

In the currency market on Wednesday, the U.S. dollar lost ground against most of its major rivals after data showed U.S. consumer prices rose in June at their fastest pace in nearly a year. The dollar index, which weighs the dollar against a basket of six other currencies, fell by almost 0.7% during the day.

In its latest monthly report, OPEC reported yesterday that global oil demand will fall by 1.6 million barrels a day this year from a year ago. It also said the cartel increased its production in June for a third straight month. As per OPEC, oil demand will fall this year as the global economy is expected to contract 1.4%. The cartel, which accounts for about one third of the world's oil production, also said its oil production in June rose to 28.441 million barrels a day.

Also at the Nymex on Wednesday, the August reformulated gasoline contract rose 6.1 cents, or 3.7%, to $1.7081 a gallon and August heating oil rose 7.02 cents, or 4.6%, to $1.5821 a gallon.

August natural-gas futures fell 14.6 cents, or 4.3%, to $3.283 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 August delivery closed at Rs 3,059/barrel, higher by Rs 84 (2.8%) against previous day's close. Natural gas for July delivery closed at Rs 159.9/mmbtu, lower by Rs 6.9/mmbtu (4.1%).