Crude Oil Rally Intensifies As Traders Jump Onto Commodities

Touches High Of 102 In Intra Day NYMEX Trading

Light, sweet crude for October delivery added 72 cents to settle at $97.88 a barrel on the New York Mercantile Exchange. The contract had reached as high as $102.24 as worries intensified about the stability of the U.S. financial system and as investors fled the equities market in favor of commodities. MCX Crude Oil for October expiry closed the session at Rs 4536 per barrel up Rs 89.
Day before yesterday, the Energy Information Administration said U.S. crude stocks fell by 6.3 million barrels for the week ending Sept. 12, much bigger than the 3.7 million barrel drop expected by analysts expected.

Gasoline inventories fell by 3.3 million barrels to 184.6 million barrels. Analysts expected stockpiles of the motor fuel to fall by 3.6 million barrels. Inventories of distillate fuel, which include diesel and heating oil, fell by 900,000 barrels to 129.6 million barrels for the week ended Sept. 12.

In economic front, Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate continued elevated pressures in the US dollar short-term funding markets. The BoC, BoE, ECB, SNB, BoJ and Federal Reserve increased their swap lines to provide improved liquidity in both term and overnight operations. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $55 billion to up to $110 million and the Swiss National Bank by $15 billion to up to $27 billion.