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Tuesday, April 06, 2010

Crude shoots up

Crude continues its upward journey on demand hopes 

Crude oil prices ended substantially higher on Monday, 05 April 2010. Prices rose on anticipation of higher demand in coming months, which arose following positive economic reports since the past couple of days at Wall Street. 

On Monday, crude-oil futures for light sweet crude for May delivery closed at $86.62/barrel (higher by $1.75 or 2%). During intra day trading, it surpassed the $87 mark. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 8.8%. 

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. But oil has also gained nearly 156% from a December, 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40. 

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies slipped by 0.2%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. 

Among economic reports scheduled on Monday, The National Association of Realtors in US reported on Monday, 05 April 2010 that there was a seasonally adjusted 8.2% increase in its pending home sales index in February. The NAR's index tracks sales contracts on existing homes, and is seen to be a good indicator of actual sales, which are recorded a month or two later at closing. 

Among other economic data, The Institute for Supply Management in US reported on Monday, 05 April 2010 that the ISM non-manufacturing index rose to 55.4% from 53.0% in February. The gain was stronger than expected. Market was expecting the index to rise to 54%. The report indicated that activity in the service sector of the U.S. economy improved markedly in March, indicating that the recovery is broadening out. 

The Labor Department in US reported on Friday, 02 April 2010 that the U.S. economy created 162,000 jobs in March 2010. It was the largest seasonally adjusted increase in nonfarm payrolls in three years. The unemployment rate was steady at 9.7%. The report detailed that nonfarm payrolls rose for just the third time in the past 27 months. 

Elsewhere, natural gas futures advanced for a second day in New York on speculation demand for the industrial fuel will strengthen as the economic recovery gains momentum. Natural gas for May delivery gained 19.1 cents (4.7%) to settle at $4.277 per million British thermal units on the New York Mercantile Exchange. Prices have dropped 23% this year.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex. 

At the MCX, crude oil for April delivery closed higher by Rs 13(0.33%) at Rs 3,843/barrel. Natural gas for April delivery closed at Rs 191/mmbtu, higher by Rs 5 (2.7%).
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