Crude shoots up

Price crosses $81 for first time in two months

Crude prices ended substantially higher on Monday, 04 January 2010, the first day of trading of FY 2010. Prices rose as the dollar fell sharply. Upbeat economic reports also helped crude oil glide up.

On Monday, crude-oil futures for light sweet crude for February delivery closed at $81.51/barrel (higher by $2.15 or 2.7%). Crude settled above $81 for the first time in two months.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October this year 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 45% since then.

A year before, 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 against almost all the counterparts. The dollar index settled for a loss of 0.5%.

Among economic data expected for the day, The Institute for Supply Management in US reported on Monday, 04 January, 2010 that manufacturing sector in US expanded in December for the fifth straight month. The ISM manufacturing index rose to 55.9% from 53.6% in November. It was the highest since April 2006. Market was expecting a modest gain to 54.2%. Readings over 50% indicate that more manufacturing firms said business was improving than said it was worsening.

Among other energy products on Monday, February gasoline rose 2.5% to $2.1044 a gallon and February heating oil gained 3.5% to $2.1905 a gallon.

Also on Monday, February natural gas rallied 5.6% to $5.884 per million British thermal units. Consumers have been using more natural gas in recent weeks as the cold weather, which could last into February, hit the U.S.

At the MCX, crude oil for January delivery closed higher by Rs 39 (1%) at Rs 3,766/barrel. Natural gas for January delivery closed higher by Rs 9.5 (3.6%) at Rs 270.6/mmbtu.