Crude pares early gains

Prices end marginally lower at the end

Crude oil prices pared all its early gains on Monday, 11 January 2010. Prices rose initially today due to the sinking dollar. Then traders focused on the fact that crude's recent gains were overdone as extreme cold temperature is expected to give way to some warmer temperature in the next few weeks.

On Monday, crude-oil futures for light sweet crude for February delivery closed at $82.53/barrel (lower by $0.22 or 0.3%). Earlier during the day, prices rose to a high of $84.05, a fifteen-month high figure. Crude ended last week higher by 4.3%. On a year to date basis till date, crude is higher by 4%.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 44% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

In the currency market on Monday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.8%. It fell to a three-week low against the euro today.

Among other energy products on Monday, heating oil for February delivery fell 2 cents, or 0.8%, to $2.18 a gallon.

Also on Monday, natural gas for February sank 5.9%, or 34 cents, to $5.41 per million British thermal units.

At the MCX, crude oil for January delivery closed Rs 45 (1.2%) lower at Rs 3,744/barrel. Natural gas for January delivery closed lower by Rs 15.6 (5.9%) at Rs 246.7/mmbtu.