Crude prices fall from all time highs

Prices end lower as the dollar gains some ground

Crude futures fell from their record highs at $143 today, Monday, 30 June, 2008 and ended little lower for the day. Prices slipped on concern that Israel may attack Iran over its nuclear program and disrupt supply from OPEC's second-largest producer. With this, prices infact rose for the day but then with the dollar gaining some grounds, oil prices slipped.

Crude-oil futures for light sweet crude for August delivery today closed at $140/barrel (lower by $0.21/barrel or 0.15%) on the New York Mercantile Exchange. During intra day trading prices touched a high of $143.67. With today’s closing, 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%. Last week, crude prices closed higher by 3.6%. Prices are 104% higher than a year ago. For the year, crude is up by 43% till date.

Supported by tensions in the Middle East, concerns about Nigerian production and ongoing talk about U.S. government control over speculative trading in the commodities markets, crude prices rose earlier in the day. But then, prices fell as the dollar strengthened. It was reported during the weekend that the U.S. has stepped up the pace of covert action taken inside Iranian territory.

At the currency markets on Monday, the euro fell for the first time in five sessions and is headed for the first quarterly decline since September 2006. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, was last at 72.43, up from 72.306.

Natural gas futures in New York advanced to the highest in more than two years on speculation rising temperatures and tropical storms may limit supply gains later this summer. Natural gas for August delivery rose 15.5 cents (1.2%) to settle at $13.353 per million British thermal units.

Against this backdrop, prices for July reformulated closed almost flat at $3.5015 a gallon on Nymex. Front-month contract prices are up over 41% year-to-date. July heating oil rose 0.4 cent to end at $3.9029 a gallon, with futures prices 47.6% higher than the end of last year. The July contracts expired at the close of today’s trading. August reformulated gasoline closed the session up 1.8 cent at $3.4991, while August heating oil added 2.3 cents to finish at $3.91.

Brent crude oil for June settlement today fell $0.48 (0.3%) to $139.83 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.

At the MCX, crude oil for July delivery closed at Rs 6,078/barrel, higher by Rs 38 (0.62%) against previous day’s close. Natural gas for July delivery closed at Rs 573.8/mmbtu, higher by Rs 5.4/mmbtu (0.95%).