Crude sheds some glaze

Oil prices give up earlier gains

Crude prices ended lower on Tuesday, 24 March, 2009 as traders anticipated that tomorrow's weekly inventory report will show build up in crude inventories for last week. Market is expecting the report to show a build up of more crude inventories to the tune of more than 1 million barrels. The rebounding dollar was also the reason for lower crude price.

On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $53.11/barrel (lower by $0.69 or 1.3%) on the New York Mercantile Exchange. Earlier it fell to a low of $52.45 and also rose to a high of $53.50. Last week, crude ended higher by 10.4%. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63% since then. Year to date, in 2009, crude prices are higher by 20.5%. On a yearly basis, crude prices are lower by 50%.

In the currency market today, the dollar strengthened against its rivals. The dollar index, which measures the strength of the dollar against a basket of six currencies rose 0.3%.

Yesterday, the Treasury Department had unveiled their plan about buying back most of the bank's toxic assets thereby cleaning up their balance sheet to the extent possible. Treasure Secretary Tim Geithner detailed today that the Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies. The move had boosted investor confidence and the same took precious metals little higher yesterday.

Also at the Nymex on Tuesday, April reformulated gasoline rose 1.2% to $1.5055 a gallon and April heating oil gained 0.2% to $1.4736 a gallon.

April natural-gas futures were almost flat at $4.303 per million British thermal units.

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