Crude-oil futures for light sweet crude for July delivery today closed at $126.62/barrel (lower by $4.4/barrel or 3.4%) on the New York Mercantile Exchange. Oil climbed as high as $132.9 after the inventory data was released.
Last week, crude prices closed higher by 5%. Price touched a high of $135.09 earlier during the week. It marked a new high almost everyday after traders speculated that crude supplies are not enough to meet the forthcoming hurricane season. For the year, crude is up by 31.2% till date. Prices have more than doubled on a yearly basis.
As per the weekly inventory report by the Energy Department, crude supplies dropped by 8.8 million barrels to 311.6 million for the week ended 23 May. The drop was reportedly due to temporary delays in crude oil tanker off-loadings. Refinery utilization was unchanged last week from the previous week at 87.9% of capacity.
EIA also reported that motor gasoline supplies fell 3.2 million barrels to 206.2 million barrels and distillate stocks were up 1.6 million barrels at 109.4 million barrels.
At the currency markets on Thursday, the dollar advanced the most in three weeks against the euro as the government said gross domestic product was stronger last quarter than initially estimated. The dollar climbed as much as 0.8% against a weighted basket of the euro, yen and four other major currencies. The dollar index, which tracks the greenback against a basket of six major currencies, was at 72.971, compared with 72.522 in the previous day.
Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Natural gas inventories rise more than expected
Brent crude oil for June settlement today fell $4.04 (3.1%) to $126.89 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Natural gas futures fell after a U.S. government report showed inventories increased more than market expected and crude oil declined. Supplies in the week ended 23 May rose 87 billion cubic feet to 1.701 trillion as against a forecast of 85 billion. Gas for July delivery fell 52.1 cents (4.3%) to settle at $11.474 per million British thermal units.
Against this backdrop, June reformulated gasoline shed 5 cents to end at $3.40 a gallon, while June heating oil closed at $3.6885 a gallon, down 13.15 cents.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
At the MCX, crude oil for June delivery closed at Rs 5,415/barrel, lower by Rs 180 (3.2%) against previous day’s close. Natural gas for July delivery closed at Rs 493.1/mmbtu, lower by Rs 20.6/mmbtu (4%).