Crude pares early losses

Crude manages to eke out marginal gains

Crude prices erased earlier losses and ended marginally higher at Nymex on Friday, 09 October, 2009. Prices fell initially due to the strong dollar but then rose on hopes of economic recovery. Crude also registered good weekly gains.

On Friday, crude-oil futures for light sweet crude for November delivery closed at $71.77/barrel (higher by $0.08 or 0.1%). For the week, crude ended higher by 2.8%.

For the month of September, 2009, crude ended higher by a marginal 0.9%. For the third quarter, crude ended higher by just 1%. Crude prices had rallied 40% and 11.3% in the second and first quarter of 2009 respectively.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63.5% since then. Year to date, in 2009, crude prices are higher by 45%.

In the currency market on Friday, the dollar firmed after Fed Chairman, Ben Bernanke said the central bank will tighten monetary policy when the economic outlook shows sufficient improvement. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.3%.

On Friday, Paris based, The International Energy Agency raised its forecasts for global oil demand for both this year and 2010, citing more optimistic economic estimates issued by the International Monetary Fund. The agency raised its expectations by 200,000 barrels a day, to average demand of 84.6 million barrels a day, for 2009, and by 350,000 barrels a day, to 86.1 million barrels a day, for 2010. Despite the increased forecasts, global oil demand in 2009 will still be 1.9% below last year's level.

Also on Friday, November natural-gas futures fell 19.7 cents, or 4%, to $4.77 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.