Crude glides up

Prices rise due to cold weather and weak dollar

After four consecutive sessions of drop, crude oil prices finally rose on Monday, 08 February 2010. Prices rose as cold weather is expected to grip parts of North America in the coming days. Prices also rose as the dollar's rally came to a halt and Nigerian militants said they disabled a pipeline operated by Royal Dutch Shell.

On Monday, crude-oil futures for light sweet crude for March delivery closed at $71.84/barrel (higher by $0.65 or 0.9%). During intra day trading, prices rose to a high of $72.39. Last week, crude had witnessed the biggest percentage daily drop in six months. Last week, crude ended lower by 2.3%. In January 2010, crude ended lower by 8.3%. On a year to date basis, crude is lower by 11%.

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 0.4%. The dollar had risen to seven month high against its counterparts last week.

Among other energy products on Monday, gasoline for March delivery rose 1 cent to end at $1.90 a gallon. Heating oil for March gained 2 cents to $1.89 a gallon.

Also on Monday, natural gas for the same month fell 11 cents (2%) to $5.40 per million British thermal units.

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 53.5% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for February delivery closed Rs 10 (0.3%) lower at Rs 3,364/barrel. Natural gas for February delivery closed lower by Rs 1.5 (0.58%) at Rs 256.7/mmbtu.