A low dollar send crude price spiraling up
Crude oil prices rose today above $98 a barrel in New York to a record close after the U.S. dollar declined to a new low against the euro.
For the day ending Tuesday, 20 November, 2007, crude-oil futures for light sweet crude for January delivery closed at $98.03/barrel (higher by $3.39/barrel or 3.6%) on the New York Mercantile Exchange. Prices are up 76% from a year ago.
Brent crude oil for December settlement rose $3.21 (3.5%) to $95.49 on the London-based ICE Futures Europe exchange.
In the currency market today, the dollar was lower across the board, hitting a new low against the euro and reversing earlier gains on the yen as stocks slumped after the Federal Reserve predicted slower economic growth next year. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, fell 0.7% at 75.22. The dollar dropped on speculation that the Federal Reserve will lower interest rates a third time this year
Last week, prices rose to $98.62/barrel during intra day trading on 7 November, 2007. Oil prices had rose 16% in October, 2007, the biggest one-month gain since September 2004.
Heating oil touches a new all time high
Natural gas in New York declined for a second day amid speculation U.S. inventories are ample for winter heating needs. Gas for December delivery fell 31.2 cents (4%) to $7.475 per million British thermal units.
Against this backdrop, December reformulated gasoline closed up 6.98 cents at $2.4515 a gallon. December heating oil ended up 8.59 cents at the strongest closing level of $2.6901 a gallon on the Nymex. It touched a new intraday high of $2.699 earlier.
Last week, OPEC reduced its fourth-quarter estimate of global oil demand growth to 1.97%, down from 2.1%, citing warmer winter weather in the Northern Hemisphere and the higher price of gasoline. The cartel also trimmed this year's world oil demand growth to 1.4% from 1.5%, but the cartel kept the first quarter of next year unchanged at 1.8%.
Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.
At the MCX, crude oil for December delivery closed at Rs 3806/barrel, higher by Rs 116 (3.1%) against previous day’s close. Natural gas closed at Rs 297/mmtbu as against previous close of Rs 309.4/mmtbu, lower by Rs 12.4/ mmtbu.
The Energy Department will come out with the weekly inventory report on crude oil and fuel products for week ended Friday, 16 November tomorrow morning at Washington at 10.30 E.T.