Crude ends modestly higher

Price crawls up on decision from Saudi Arabia

Crude futures closed higher by more than $1 on Monday, 23 June, 2008. Prices rose in reaction to Saudi Arabia’s weekend decision to increase production for next month. Traders were infact disappointed with the same.

Crude-oil futures for light sweet crude for August delivery today closed at $136.74/barrel (higher by $1.38/barrel or 1%) on the New York Mercantile Exchange. It traded as high as $137.85 during intra day trading. Last week, it closed lower by 0.2%. Prices are 94% higher than a year ago. For the year, crude is up by 38% till date.

At a meeting of oil producers and consumers, during the weekend, on Sunday, Saudi Arabia said it would raise its daily production by 200,000 barrels in July. That's on top of the increase of 300,000 barrels a day announced in May.

At the currency markets on Monday, the dollar index which measures the greenback against a basket of trading partners, was at 73.47, compared with 73.05 late Friday. The euro lost ground after closely tracked gauges of German economic sentiment and euro-zone activity weakened more than expected in June.

Natural-gas prices headed higher as well. July natural gas finished up 20.9 cents, or 1.6%, at $13.203 per million British thermal units.

Against this backdrop, prices for petroleum products climbed along with crude on the futures markets. July reformulated gasoline climbed by 1.6 cents to close at $3.4551 a gallon, while July heating oil closed at $3.7964 a gallon, up 2.5 cents.

At the MCX, crude oil for July delivery closed at Rs 5,883/barrel, higher by Rs 104 (1.8%) against previous day’s close. Natural gas for June delivery closed at Rs 571.6/mmbtu, higher by Rs 8.9/mmbtu (1.6%).