OPEC report pushes crude higher

Prices at highest level in almost two months

Crude prices ended higher at Nymex on Tuesday, 13 October, 2009. Though prices pared initial gains, still they managed to end higher at the end. Prices rose today as oil cartel OPEC increased its forecast for global oil demand.

On Tuesday, crude-oil futures for light sweet crude for November delivery closed at $74.15/barrel (higher by $0.88 or 1.2%). During intra day trading, it rose to a high of $74.85. Last 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 60.3% since then. Year to date, in 2009, crude prices are higher by 48.2%.

In the latest monthly report, the Organization of the Petroleum Exporting Countries on Tuesday 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.

Last Friday, 9 October, 2009, 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.

In the currency market on Tuesday, the dollar fell against most of its rivals. The euro climbed up substantially today. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell to fourteen month low figure.

Among other energy related products, November reformulated gasoline rose 3.28 cents, 1.8%, to $1.831 a gallon and November heating oil gained 2.9 cents, or 1.5%, to $1.9234 a gallon.

Also on Tuesday, November natural-gas futures fell 29.2 cents, or 6%, to $4.588 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 18 (0.52%) at Rs 3,4257/barrel. Natural gas for October delivery closed lower by Rs 17 (7.5%) at Rs 210.8/mmbtu.