Crude ends marginally higher

Prices crawl up due to positive consumer confidence data

Crude oil prices ended marginally higher, off their intra day highs, on Tuesday, 30 March 2010. Prices ended higher due to better than expected consumer confidence report.

On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $82.37/barrel (higher by $0.2 or 0.2%). It stayed above the $82 mark for most part of the day. Prices lost 1.2% last week.

Crude prices rose 9.3% in February as supply-and-demand issues began to take hold in a market for months dominated by moves in the dollar. Prices have ranged between $69 and $84 a barrel since October. Crude has risen 72.7% in last one year.

The Conference Board in US reported on Tuesday, 30 March 2010 that U.S consumer confidence rebounded in March after falling sharply in the prior month. As per the report, the consumer confidence index rose to 52.5 in March from 46.4 in February. Confidence had dropped significantly in February from 56.5 in January.

The gain in confidence was above forecasts. Market had expected the index to rebound to 51. The February confidence index was revised up from the initial estimate of 46. The present situation index rose to 26 from 21.7, while the expectations index improved to 70.2 from 62.9.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.2%. But the British pound continues to outperform the buck. Strength in the British pound comes amid news that Britain's fourth quarter GDP was upwardly revised to reflect a 0.4% increase.

This week's weekly inventory report for crude and crude products is scheduled for Wednesday. The report is expected to show another build up in crude inventories for last week. The EIA reported last Wednesday that crude-oil inventories rose by 7.245 million barrels against an expected buildup of 1.67 million barrels for week ending 19 March. Despite the surprising inventories number, traders had focused more on data declines in stockpiles of gasoline and distillates such as diesel and heating oil. The EIA had also showed a combined decline of 5.14 million barrels in stocks of gasoline and distillates.

Last week, Organization of Petroleum Exporting Countries decided to keep its production quota unchanged.

Elsewhere, natural gas for May delivery ended higher by 1.5% at $3.98 per 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 45% 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 April delivery closed lower by Rs 3 (0.08%) at Rs 3,703/barrel. Natural gas for April delivery closed at Rs 178.9/mmbtu, lower by Rs 0.6 (0.33%).