Crude climbs up marginally

OPEC cuts give hope of rising price

Oil prices rose today, Tuesday, 03 February, 2009 on anticipation that the production cuts announced by OPEC will help boost crude prices in the coming months. Prices also rose due to the weak dollar.

On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $40.78/barrel (higher by $0.70 or 1.7%) on the New York Mercantile Exchange. Earlier during the day, it touched a high of $41.17. Last week, crude prices ended lower by 10%. In January, 2009, crude shed 14%.

Prices reached a high of $147 on 11 July but have dropped almost 70% since then. Year to date, in 2009, crude prices are lower by 8.6%. On a yearly basis, crude prices are lower by 54%.

At the currency market on Tuesday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, fell by 1%.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

OPEC has been trying to cut production consistently in order to step up prices from their current low levels.

Against this background, March reformulated gasoline rose 1.5% to $1.167 a gallon, while March heating oil lost 1.3% to $1.3254 a gallon.

March natural gas futures lost 1% to $4.513 per million British thermal units.

At the MCX, crude oil for February delivery closed at Rs 1,975/barrel, lower by Rs 48 (2.4%) against previous day's close. Natural gas for February delivery closed at Rs 217.5/mmbtu, lower by Rs 8.7/mmbtu (3.5%).