Crude witnesses longest losing streak in eight years

Prices continue to soften on demand worries

Crude prices extended its losing streak and ended lower for ninth straight day on Monday, 14 December, 2009. This was the longest losing streak for crude in almost eight years. Prices fell today on demand concerns despite agencies hiking their crude demand forecast in recent times . The slipping dollar limited crude's losses.

On Monday, crude-oil futures for light sweet crude for January delivery closed at $69.51/barrel (lower by $0.36 or 0.5%). The contract has lost almost 12% in the past nine sessions. During intra day trading, it rose to a high of $70.28. Last week, crude ended lower by 7.4%. Crude ended month of November, higher by 0.4%. In December, till now, crude has shed almost 9.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 59% since then.

In the currency market on Monday, the dollar index, which weighs the strength of dollar against a basket of six other currencies fell by almost 0.3%.

On last Friday, Paris-based IEA, hiked its forecast for 2010 global oil demand by 130,000 barrels a day to an average 86.3 million barrels a day. That represents an increase of 1.7%, or 1.5 million barrels a day, compared to 2009. The IEA also left its forecast for 2009 oil demand virtually unchanged at 84.9 million barrels a day, a decline of 1.6% year-on-year.

Also, earlier last week, in the latest monthly report the EIA reported that it expects oil prices to average $76 a barrel this winter from October to March. The price target came just $1 lower than the previous month's forecast. The agency expects prices will dip to $75 early next year and will then rise to $82 a barrel by December 2010.

Among other energy products on Monday, January gasoline fell 1.49 cents, or 0.8%, to $1.8267 a gallon, January heating oil was nearly flat at $1.9082 a gallon.

But on Monday, January natural gas rallied 16.9 cents, or 3.3%, to $5.332 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 December delivery closed higher by Rs 5 (0.15%) at Rs 3,262/barrel. Natural gas for December delivery closed higher by Rs 2 (0.82%) at Rs 243.6/mmbtu.