Crude pares gains

Strong dollar and mixed data pull crude lower

Crude prices ended lower on Monday, 01 March 2010. Prices fell at the end as the dollar climbed up against the euro and also due to mixed economic data.

On Monday, crude-oil futures for light sweet crude for April delivery closed at $78.7/barrel (lower by $0.96 or 1.2%). During intra day trading, crude rose to a high of $80.62.

In the currency market on Monday, the dollar strengthened against the euro. The dollar climbed up almost 1.3% against the euro. The dollar index, which gained more than 1% ultimately ended the day with a 0.6% gain.

Among the major economic data expected for the day, the Institute for Supply Management reported Monday that its index of manufacturing activity slipped a bit to 56.5 last month, but still reflected an expansion in manufacturing. Crucially, its employment index grew for the third consecutive month.

Also on Monday, natural gas for April delivery fell 13 cents, or 2.8%, to $4.679 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 48.8% 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 45 (1.22%) lower at Rs 3,624/barrel. Natural gas for March delivery closed lower by Rs 3.9 (1.8%) at Rs 217/mmbtu.