Crude ends little higher

Prices settle modestly higher after touching new all time high due to supply concerns

Crude prices closed little higher today, Monday, 28 April, after reaching an all time high during intra day trading. Prices rose after BP shut a North Sea pipeline and a strike and rebel attacks in Nigeria disrupted production. Crude oil futures also stemmed from a strike called at a refinery in Scotland, forcing a key pipeline to be closed. The weaker dollar also spurted up crude prices.

Crude-oil futures for light sweet crude for June delivery closed at $118.75/barrel (higher by $0.23/barrel or 0.2%) on the New York Mercantile Exchange. Prices touched an all time high of $119.93 during intra day trading. For the year, crude is up by 22% till date. Oil increased 79% in the past year as supply failed to keep up with surging demand in China, India and the Middle East.

BP closed the Forties Pipeline System, carrying 40% of the U.K.'s oil production, after a strike at the Grangemouth refinery in Scotland cut power supplies. Further, a walkout by Exxon Mobil workers entered a fifth day in Nigeria, where production has dropped substantially in the last couple of days.

In the currency market today, the dollar fell slightly supporting gold's gains, as traders weighed the odds of the Federal Reserve further reducing benchmark U.S. interest rates. The dollar index, which tracks the value of the greenback against a basket of other currencies, fell 0.1% to 72.61.

Brent crude oil for June settlement today rose $0.40 (0.3%) to $116.74 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.

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Natural gas advances 51% this year

Natural gas advanced to a 28-month high as crude oil surged to a record after supplies were crimped by closure of a pipeline and a workers' strike. Gas for May delivery rose 31.7 cents (2.9%) to settle at $11.28 per million British thermal units. Gas has advanced 51% this year.

Against this backdrop, June reformulated gasoline fell 2.3 cents to $3.0307 a gallon and June heating oil was almost flat at $3.2988 a gallon.

Crude-oil prices were also rising on rebel attacks on oil installations in Nigeria. Five policemen were killed on last Sunday when rebel groups attacked the nation's largest oil and gas terminal. The development came amid renewed supply concerns last week after a rebel group attacked a pipeline late Thursday in Nigeria's southern Rivers State.

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 May delivery closed at Rs 4,758/barrel, higher by Rs 10 (0.2%) against previous day’s close. Natural gas for July delivery closed at Rs 453/mmbtu, higher by Rs 5.3/mmbtu (1.2%).