Crude continues to slip

Prices recover from intra day low but end almost 2% lower

Crude oil prices went further down on Monday, 15 June, 2009. They fell as the dollar strengthened in the wake of supportive comments regarding the greenback's status as a reserve currency. Prices also fell amid more than required supply concerns. But natural gas prices ended substantially higher.

On Monday, crude-oil futures for light sweet crude for July delivery closed at $70.62/barrel (lower by $1.42 or 1.9%). During intra day trading, crude fell to a low of $69.8. Last week, crude ended higher by 5.3%.

Crude ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 51% since then. Year to date, in 2009, crude prices are higher by 41%.

In the currency market on Monday, the dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by 1.5% earlier during the day but ended higher by 0.9%. Dollar gained in the wake of supportive comments regarding the greenback's status as a reserve currency from a Russian official ahead of a meeting of BRIC nations.

Last week, Organization of the Petroleum Exporting Countries said in a monthly report that May output from its 12 members averaged 28.27 million barrels a day, up 135,000 barrels from a month ago.

Also at the Nymex on Monday, July reformulated gasoline gained 1 cent to end at $2.053 a gallon, while July heating oil dropped 2.20 cents to $1.816 a gallon.

July natural-gas futures rallied 32.50 cents, or 8.4%, to finish at $4.182 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 July delivery closed at Rs 3,400/barrel, lower by Rs 73 (2.1%) against previous day's close. Natural gas for June delivery closed at Rs 197.3/mmbtu, higher by Rs 11.7/mmbtu (6.3%).