Crude ends marginally higher

Crude oil prices ended marginally higher on Tuesday, 06 April 2010. Prices oscillated in tandem fluctuating US stocks and rising US dollar. Ultimately, prices rose on anticipation of higher demand in coming months, which arose following positive economic reports since the past couple of days at Wall Street.

On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $86.84/barrel (higher by $0.22 or 0.2%). During intra day trading, it dropped quite significantly. For the month of March, crude rose 5.1%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 9%.

Prices are still very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 156% from a December, 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by almost 0.6%. The dollar index gained about 0.7% in March and rallied 4% during the first quarter. The dollar index has gained 4.7% this year till date.

Among economic reports scheduled on Tuesday, minutes from the most recent FOMC meeting were announced. According to those minutes, the Fed's extended period language does not limit ability to tighten policy promptly, but the "extended period" could last longer if economy worsens or inflation declines. To the latter point, the FOMC members stated that consumer spending in the first quarter still seemed constrained and that inflation data has shown a greater-than-expected decline.

Elsewhere, natural gas futures fell the most in more than two weeks in New York on speculation that supplies of the power plant and industrial fuel will be ample to meet U.S. requirements. Natural gas for May delivery declined 18.1 cents (4.2%) to settle at $4.096 per million British thermal units. The contract is down 26% this year.

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. 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 higher by Rs 1 (0.02%) at Rs 3,844/barrel. Natural gas for April delivery closed at Rs 182.8/mmbtu, lower by Rs 8.2 (4.2%).