Crude sinks further

Prices continue to glide down pressured by strong dollar

Following other commodity prices, crude prices ended lower on Monday, 17 August, 2009. Prices fell as dollar strengthened following a huge sell off in international equity market overnight. The Chinese market led the pack of decliners.

On Monday, crude-oil futures for light sweet crude for September delivery closed at $66.75/barrel (lower by $0.76 or 1.1%). During intra day trading, crude fell to an intra day low of $65.23/barrel. Last week, crude ended lower by 4.8%.

For the month of July, 2009, crude ended lower by a marginal 0.6%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55% since then. Year to date, in 2009, crude prices are higher by 42%.

In the currency market on Monday, the dollar index which weighs the value of dollar against a basket of six other currencies, rose by 0.4%.

Triggering a broad retreat in global stocks, Shanghai stocks fell 5.8% yesterday, their biggest drop this year, after persistent worries over Beijing's moves to cool economic growth added to investor caution.

Also at the Nymex on Monday, September-reformulated gasoline gained 1.35 cents to end at $1.9515 a gallon, while September heating-oil futures dropped 1.45 cents to finish at $1.8265 a gallon.

September natural-gas futures fell 7.50 cents to end at $3.163 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 September delivery closed lower by Rs 29 (0.85%) at Rs 3,353/barrel. Natural gas for August delivery closed lower by Rs 5.7(3.5%) at Rs 154.4/mmbtu.