Price settles above $102 as dollar slips to a three year low against the yen
Crude prices rose by almost $2 today, Monday, 3 March, 2008 during intraday trading and almost kissed the $104/barrel mark but then gave up mart of its gains and closed modestly higher at the end. Prices increased after the dollar fell to new lows against most of its counterparts, and bumped into a new low against euro and a three year low against the yen.
Crude-oil futures for light sweet crude for April delivery today closed at $102.45/barrel (higher by $0.61/barrel or 0.6%) on the New York Mercantile Exchange. Prices are 66% higher than a year ago. It touched an intra day high price of $103.9/barrel today.
In the currency market today, the dollar bumped to a new record low against the euro and three-year lows against the yen, but the greenback pared its losses after U.S. economic data that came out weren't as bad as expected. The dollar index, which measures the greenback against a basket of six major currencies, was at 73.730, compared with 73.754 in late U.S. trading on last Friday.
The Commerce Department reported today that there was a 1.7% drop in building spending during January. Manufacturing in the U.S. shrank at the fastest pace in almost five years and construction spending fell the most since 1994. Also, the Institute for Supply Management's factory index dropped to 48.3 in February from 50.7 the previous month.
Brent crude oil for April settlement today rose $0.38 (0.4%) to $100.48 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Natural gas advances 25% this year
Natural gas declined as some speculators trimmed positions after the fuel surged as much as 3% to more than a two-year high. Gas for April delivery fell 2 cents (0.2%) to settle at $9.346 per million British thermal units. Gas has advanced 25% so far this year.
Against this backdrop, April reformulated gasoline gained slightly to $2.672 a gallon, with April heating oil ahead 3.39 cents at $2.8408 a gallon.
In a monthly report released earlier this month, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
At the MCX, crude oil for March delivery closed at Rs 4,166/barrel, higher by Rs 115 (2.8%) against previous day’s close. Natural gas for March delivery closed at Rs 385.4/mmtbu, higher by Rs 12.6/mmtbu (3.4%).