Crude remains above $70

Soft dollar helps crude remain strong

Crude prices ended higher at Nymex on Tuesday, 06 October, 2009. Prices rose as dollar fell to fresh lows once again today following hike in interest rate by Australia.

On Tuesday, crude-oil futures for light sweet crude for November delivery closed at $70.88/barrel (higher by $0.47 or 0.71%). During intra day trading, it rose to a high of $71.77. Last week, crude ended higher by 6%.

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 65% since then. Year to date, in 2009, crude prices are higher by 44%.

In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.6%. The dollar also fell after the Reserve Bank of Australia boosted its cash rate by a quarter of a percentage point to 3.25%, marking the first hike since March 2008.

Also weighing on the greenback was a report that said Gulf-area oil producers, in concert with China, Russia, Japan and France, are planning to end the practice of pricing oil in dollars.

Among other energy products on Tuesday, November reformulated gasoline rose 1.9 cents, or 1%, to $1.7727 a gallon. November heating oil gained 2 cents, or 1.3%, to $1.8142 a gallon.

Also on Tuesday, November natural-gas futures closed 11 cents, or 2.1%, lower at $4.88 per million British thermal units by the close of floor trading.

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 lower by Rs 31(0.92%) at Rs 3,318/barrel. Natural gas for October delivery closed lower by Rs 8.5 (3.6%) at Rs 227/mmbtu.