Crude touches $80 mark

Prices rise on strong China economy's figure

Crude prices ended substantially higher at Nymex on Monday, 19 October, 2009 and ended near the $80 mark for the first time in a year. Lower dollar and encouraging figures about China's economy pulled up oil prices today.

On Monday, crude-oil futures for light sweet crude for November delivery closed at $79.91/barrel (higher by $1.08 or 1.4%). Last week, crude ended higher by 9.4, the biggest weekly gain in two months%. In the past two weeks, crude has climbed up by almost 14%.

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 55% since then. Year to date, in 2009, crude prices are higher by 58%.

In a latest report, it was reported yesterday that China, the world's second biggest oil consumer, saw economic growth at an estimated rate of 9% in the third quarter. That's up sharply from 7.9% growth in the second quarter and 7.1% over the first half of the year.

In the currency market on Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.

In the latest monthly report, the Organization of the Petroleum Exporting Countries, last week, raised its forecast for world oil demand by 200,000 barrels a day for both this year and 2010. After the revision, world oil demand in 2009 is expected to average 84.2 million barrels a day, which represents a decline of 1.4 million barrels from 2008 levels. In 2010, global oil demand is expected to average 84.9 million barrels a day, marking a growth of 700,000 barrels a day from 2009 levels.

Among other energy related products, November reformulated gasoline gained 0.4% to $1.9872 a gallon and November heating oil added 1.1% to $2.0522 a gallon.

Also on Monday, November natural-gas futures rose 1.1% to $4.835 per million British thermal units.

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