Crude crosses $70

Prices rise to seven month highs

The weak dollar pushed crude prices higher on Tuesday, 09 June, 2009. Price rose to seven month high today also after energy department increased its forecast for crude prices for the rest of the year.

On Tuesday, crude-oil futures for light sweet crude for July delivery closed at $70.01/barrel (higher by $1.92 or 2.8%). Last week, crude ended higher by 3.2%.

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 40% since then. Year to date, in 2009, crude prices are higher by 40%.

In the currency market on Tuesday, the dollar paused from its steep increase over the past few trading sessions, as investors gauged the long-term staying power of the greenback's recent resurgence. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down by almost 0.9%.

The Energy Information Administration on Tuesday raised its outlook for this year's crude-oil and gasoline prices. The body said that crude prices are expected to average $58.70 a barrel this year. That's up from the $52 a barrel the EIA had forecast a month ago. It also raised the outlook for next year's crude price to $67.42 from $58. The EIA also said regular gasoline prices are expected to average close to $2.70 a gallon in July. The average regular gasoline price averaged across the full year is expected to be $2.33 a gallon.

Also at the Nymex on Tuesday, July reformulated gasoline rose 3.4 cents to $1.97 a gallon and July heating oil gained 4.2 cents to $1.81 a gallon.

Natural gas for July delivery fell fractionally to end at $3.73 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 June delivery closed at Rs 3,298/barrel, higher by Rs 31 (0.94%) against previous day's close. Natural gas for June delivery closed at Rs 176.3/mmbtu, lower by Rs 1.4/mmbtu (0.8%).