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Tuesday, July 21, 2009

Crude edges up

Prices rise as dollar weakens

Crude price ended higher on Monday, 20 July, 2009. Prices registered gains today due to the weak dollar.

On Monday, crude-oil futures for light sweet crude for August delivery closed at $63.98/barrel (higher by $0.42 or 0.6%). Earlier during the day, it hit a high of $64.9. Last week, crude ended higher by 6.1%.

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 56% since then. In July, 2009, it has dropped by 8% till date. Year to date, in 2009, crude prices are higher by 43.1%.

In the currency market on Monday, the U.S. dollar index, a six-currency gauge of the greenback's value, fell to a six-week low on speculation that European and U.S. economic reports this week will show the global recession is easing. The dollar index slipped by 1.1% today.

Last week, in its latest monthly report, OPEC reported 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 Monday, August reformulated gasoline gained 2 cents to $1.79 a gallon and August heating oil rose 5 cents to $1.69 a gallon.

August natural gas futures gained 2 cents to $3.69 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 unchanged at Rs 3,149/barrel. Natural gas for August delivery closed at Rs 185.8/mmbtu, lower by Rs 2.9/mmbtu (1.53%).

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