Crude rises for first time in six days

Prices rise in tandem with US stocks

Crude oil prices ended higher for the first time in six days on Tuesday, 19 January 2010. Prices rose in tandem with US stocks. Last week, it had ended lower on all the days of the week. However, strong dollar limited crude's gains. Nymex trading was shut yesterday due to a holiday.

On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $79.02/barrel (higher by $1.02 or 1.3%). Crude ended last week lower by 5.7%. On a year to date basis till date, crude is lower by 2.1%.

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 46% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

In the latest report, the Organization of the Petroleum Exporting Countries said today that world oil demand is forecast to grow by 800,000 barrels a day this year to average 85.1 million barrels a day, representing no major change from last month's forecast.

Paris based, IEA, left its forecasts for global oil demand for 2010 virtually unchanged in its latest monthly report last week. It forecasts demand of 86.3 million barrels a day in 2010, up 1.7%, or 1.4 million barrels a day higher than 2009.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.8%.

Among other energy products on Tuesday, February gasoline ended higher, up 1.4 cents, or 0.7%, at $2.0591 a gallon. Heating oil for February delivery closed nearly flat, at $2.0454 compared to $2.046 a gallon in the prior floor session.

Also on Tuesday, natural gas for February delivery sank 13 cents, or 2.4%, to $5.557 per million British thermal units.

At the MCX, crude oil for February delivery closed Rs 4 (0.11%) higher at Rs 3,610/barrel. Natural gas for January delivery closed higher by Rs 3.6 (1.4%) at Rs 259.4/mmbtu.