Crude gallops above $71

Prices rise for first time in four days

Crude prices ended higher for the first time in four sessions at Nymex on Tuesday, 22 September, 2009. Prices rose as traders anticipated that tomorrow's weekly inventory report will show larger than expected drop in crude inventories for last week. The weak dollar also pushed up oil prices higher.

On Tuesday, crude-oil futures for light sweet crude for October delivery closed at $71.55/barrel (higher by $1.84 or 2.6%). Today was the last day of trading for October crude. November crude, which registered more volume, ended up 2.6% at $71.76 a barrel. Last week, crude ended higher by 4%.

For the month of August, 2009, crude ended higher by a marginal 0.7%. 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 54% since then. Year to date, in 2009, crude prices are higher by 50.8%.

As per latest reports, market is expecting EIA to show a drop of 2.5 million barrels of crude oil for last week.

In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.7%.

Federal Reserve started its two day meet on monetary policy today. The FOMC will release tomorrow a statement on monetary policy that may clarify how the central bank plans to unwind its quantitative easing programs.

Among other energy products on Tuesday, October reformulated gasoline gained 3.02 cents, or 1.7%, to $1.7816 a gallon, and October heating oil added 6.04 cents, or 3.4%, to $1.8121 a gallon.

Also on Tuesday, October natural gas rose 3.3 cents, or 0.9%, to $3.609 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 October delivery closed higher by Rs 64 (1.9%) at Rs 3,445/barrel. Natural gas for September delivery closed lower by Rs 9.2 (5.1%) at Rs 169.7/mmbtu.