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Tuesday, September 01, 2009

Crude plunges

Monday's losses erase almost all of crude's monthly gains for August

Crude prices ended substantially lower on Monday, 31 August, 2009. Drop in global indices yesterday once again dampened investor sentiments for overall global recovery and hence crude slipped.

On Monday, crude-oil futures for light sweet crude for October delivery closed at $69.96/barrel (lower by $2.78 or 3.8%). Last week, crude ended higher by 9.5%. It was the biggest weekly gain for crude in three months.

For the month of August, 2009, crude ended higher by a marginal 0.7%. 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 53% since then. Year to date, in 2009, crude prices are higher by 45%.

In the currency market on Monday, the dollar index, which weighs the strength of dollar, against a basket of six other currencies ended lower by 0.2%.

Among economic reports expected on Monday, manufacturing activity improved for the third straight month in the Chicago region in August. The Chicago purchasing managers index rose to 50% in August from 43.4% in July, 2009.

Also at the Nymex on Monday, September reformulated gasoline lost 7.23 cents, or 3.5%, to $1.9895 a gallon and September heating oil tumbled 8.11 cents, or 4.4%, to $1.7792 a gallon. Both contracts expired on Monday.

October natural gas fell 5.6 cents, or 1.8%, to $2.977 per million British thermal units. Natural gas is set to end the month down more than 20%.

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

At the MCX, crude oil for September delivery closed lower by Rs 121 (3.4%) at Rs 3,431/barrel. Natural gas for September delivery closed lower by Rs 1.1 (0.74%) at Rs 147.5/mmbtu.

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