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Tuesday, August 04, 2009

Crude and natural gas take a huge leap

Prices rise on upbeat economic data

Crude prices ended substantially higher on Monday, 03 August, 2009. Prices rose as the dollar weakened and also as economic data showed that though USA's manufacturing firms continued to contract, they maintained their steady improvement in July, proving that the manufacturing downturn is nearing its end.

On Monday, crude-oil futures for light sweet crude for September delivery closed at $71.58/barrel (higher by $2.13 or 3%). During intra day trading, it rose to a high of $72.1. Last week, crude ended higher by 2.1%.

For the month of July, 2009, crude ended lower by a marginal 0.6%. 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 44% since then. Year to date, in 2009, crude prices are higher by 48.4%.

In the currency market on Monday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 1%.

As per latest report, China's manufacturing purchasing managers index remained in expansionary territory for the fourth consecutive month in July, rising to 52.8, up from 51.8 in June.

At Wall Street on Monday, The Institute for Supply Management reported on Monday, 03 August, 2009 that its index rose to 48.9% in July above the 46.2% expected. It was also higher than the 44.8% in June. It's the highest reading since last August. Readings below 50% in the ISM diffusion index indicate that more firms are contracting than growing. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better or worse this month than last.

Also at the Nymex on Monday, September reformulated gasoline rose 6 cents, or 3%, to $2.07 a gallon and September heating oil gained 4 cents to $1.87 a gallon.

September natural-gas futures rallied 38 cents, or 10.4%, to $4.03 per million British thermal units on the Nymex.

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 higher by Rs 94 (2.83%) at Rs 3,415/barrel. Natural gas for August delivery closed at Rs 191.8/mmbtu, higher by Rs 16.9/mmbtu (9.7%).

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