Crude glides up again

Strong housing report boosts prices

Crude oil ended higher for the fourth straight day on Monday, 04 May, 2009. Couple of optimistic economic reports gave Wall Street another boost today. Better than expected data on construction and pending home sales front gave investors some hope that the worst might be over in terms of the ongoing recession and energy demand might pick up in the coming months.

On Monday, crude-oil futures for light sweet crude for June delivery closed at $54.47/barrel (higher by $1.27 or 2.3%) on the New York Mercantile Exchange. It earlier fell more than 1% to as low as $52.56. Last week, crude ended higher by 3.2%.

Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. 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 61% since then. Year to date, in 2009, crude prices are higher by 16.3%. On a yearly basis, crude prices are lower by 48%.

Economic reports garnered most of the attention since morning today. The National Association of Realtors reported today that pending home sales in US improved in March due to falling prices, lower mortgage rates and tax subsidies.

As per the report, NAR's pending home sales index rose 3.2% in March after a 2% rise in February. It was also up 1.1% compared with a year earlier. The index is based on signed sales contracts on previously owned homes. Sales are recorded in the existing-home sales report upon closing, usually six to eight weeks after the contract is signed.

In a separate report, The Commerce Department reported today that construction outlays in US rose 0.3% in March, better than the 1.5% decline expected. January and February spending was revised higher as well.

On Monday, in the currency market, the dollar fell after the home-sales data, with the dollar index, which gauges the value of the greenback against a trade-weighted basket of six major rivals, down 0.8% at 83.847.

Also at the Nymex on Monday, June reformulated gasoline rose 6.86 cents, or 4.5%, to $1.586 a gallon and June heating oil added 4.61 cents, or 3.3%, to $1.4345 a gallon.

Natural gas for June delivery advanced 17.9 cents, or 5%, to $3.725 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 May delivery closed at Rs 2,678/barrel, higher by Rs 34 (1.3%) against previous day's close. Natural gas for April delivery closed at Rs 184.6/mmbtu, higher by Rs 6.7/mmbtu (3.7%).