Crude prices end lower for first time in four sessions

Prices drop by almost $6 earlier in the day but close more than $3 lower

Crude prices fell for the first time in four days today, Monday, 7 July, 2008. Prices dropped by more than $6 earlier in the day today but then pared some of their losses and closed lower by more than $3 at the end. The stronger dollar and Iran’s nuclear programme related comments during the weekend affected crude prices.

Crude-oil futures for light sweet crude for August delivery today closed at $141.37/barrel (lower by $3.92/barrel or 2.7%) on the New York Mercantile Exchange. Prices fell by almost $6 to $139 during intraday trading. Last week, prices gained $5.08 (3.6%).

Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Prices are 105.5% higher than a year ago. For the year, crude is up by 44% till date.

At the currency markets on Monday, the U.S. dollar had began the week higher against major currencies aided by a firmer tone in equity markets, a retreat in oil prices and reluctance to sell the greenback in the midst of the meeting of the Group of Eight world leaders in Japan. But the dollar lost its gains in mid-day trading after the equities market turned south, spooked by news of possible capital raising by U.S mortgage giants Freddie Mac and Fannie Mae. The dollar index which measures the greenback against a trade-weighted basket of currencies fetched 72.668, down from 73.104 earlier in the day.

Against this backdrop, August reformulated gasoline fell 8.8 cents to $3.483 a gallon and August heating oil dropped 13.6 cents to $3.97 a gallon. And August natural-gas futures fell 60 cents to $12.977 per million British thermal units

At the MCX, crude oil for July delivery closed at Rs 6,160/barrel, lower by Rs 71 (1.1%) against previous day’s close. Natural gas for July delivery closed at Rs 566.6/mmbtu, lower by Rs 19.9/mmbtu (3.4%).