Crude shoots up

Positive economic reports and Fed Chairman's comments boost prices

Upbeat economic reports and comments from Federal Reserve pushed up crude prices higher at Nymex on Tuesday, 15 September, 2009. The lower dollar also boosted crude price.

On Tuesday, crude-oil futures for light sweet crude for October delivery closed at $70.93/barrel (higher by $2.07 or 3%). It earlier fell to a morning low of $68.48 and rose to an intraday high of $71.19. Last week, crude ended higher by 1.9%.

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 55% since then. Year to date, in 2009, crude prices are higher by 49.7%.

Federal Reserve Chairman, Bon Bernanke commented today that the current recession is likely over.

The dollar strengthened initially today following a batch of upbeat economic reports. But then, as investors turned towards equities, dollar pared its gains. In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by 0.2%.

Among economic reports expected, The New York Federal Reserve Bank reported on Tuesday, 15 September, 2009 that manufacturing activity in the New York area rebounded to its highest level since the recession began in late 2007. As per the report, the bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. This is the seventh straight increase in the index. Nearly 40% of manufacturers reported that conditions had improved in September while 20% said conditions had worsened.

In a separate report, the Commerce Department reported on Tuesday, 15 September, 2009 that U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years. Market was expecting a figure around 2.3%. Sales are down 5.3% compared with a year earlier.

Natural gas prices went up today. The October contract gained 0.7% to finish at $3.32 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 higher by Rs 77 (2.3%) at Rs 3,433/barrel. Natural gas for September delivery closed higher by Rs 8.2 (5.1%) at Rs 167.3/mmbtu.