Crude pares earlier losses

Prices rise more than 2% after OPEC keeps production levels unchanged

Hopes of global economic recovery and OPEC deciding to keep current production level sent crude prices higher on Monday, 16 March, 2009. Prices fell earlier today as traders digested the news that OPEC's meeting at Vienna this weekend was inconclusive regarding any further production cut.

On Monday, crude-oil futures for light sweet crude for April delivery closed at $47.35/barrel (higher by $1.1 or 2.5%) on the New York Mercantile Exchange. Earlier during the day, prices dropped as much as 3%. Last week, crude ended higher by 1.6%. For the month of February, crude prices had ended higher by 1.5%.

Prices had remained extremely volatile last week. Prices reached a high of $147 on 11 July, 2008 but have dropped almost 65% since then. Year to date, in 2009, crude prices are higher by 10.7%. On a yearly basis, crude prices are lower by 58%.

Stocks at US rallied today on reports that the recession in which US has sunk might end by the end of this year provided the fact that proper steps are taken to save the economy from current financial turmoil.

Last Friday, the IEA said in the monthly report that global oil supply in February is estimated at 83.9 million barrels a day, down 1 million barrels from a month ago and 3.4 million barrels from a year ago. The agency also lowered its forecast for this year's global oil demand to 84.4 million barrels a day, 1.5%, or 1.2 million barrels, lower than a year ago.

Also at the Nymex on Monday, April reformulated gasoline gained 1.1% to $1.3673 a gallon and April heating oil rose 1.3%, to $1.2130 a gallon.

April natural-gas futures dropped 2.1% to $3.85 per million British thermal units.

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

At the MCX, crude oil for March delivery closed at Rs 2,453/barrel, higher by Rs 36 (1.5%) against previous day's close. Natural gas for February delivery closed at Rs 198.4/mmbtu, lower by Rs 5.5/mmbtu (2.7%).