Crude stays strong

Economic data and oil spill news keep prices steady

Crude oil ended higher at Nymex on Monday, 03 May 2010. Economic data and news about oil spill at Gulf of Mexico kept prices strong. Prices rose despite a strong dollar.

On Monday, crude-oil futures for light sweet crude for June delivery closed at $86.19/barrel (higher by $0.04 or 0.1%). Oil for July delivery rose 79 cents, or 0.9%, to $89.15 a barrel. Last week, crude ended higher by 1.2%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is higher by 8.4%.

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 155% 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 Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.5%. The dollar is up some 5.5% for the year.

The Commerce Department in US reported on Monday, 03 May 2010 that boosted by spending on autos, real U.S. consumer spending increased 0.5% to a record high in March, the highest in five months time. After-tax, inflation-adjusted incomes increased 0.2% in the month, with transfer payments such as unemployment benefits accounting for the gain. With spending growing much faster than incomes in March, the personal savings rate fell to 2.7%, the lowest since September 2008. The savings rate had peaked at 6.4% last May.

Prices also remained higher following news that the Institute for Supply Management's manufacturing index for April came above consensus, rising to 60.4% compared with 59.6% in March.

Meanwhile, emergency efforts to bring under control the growing amounts of oil leaking from a ruptured deepwater well in the Gulf of Mexico ranked as the biggest headline for the energy sector to start the trading week. The deadly explosion on the Deepwater Horizon drilling rig happened nearly two weeks ago.

Among other energy products on Monday, gasoline for June delivery added 4 cents, or 1.5%, to settle at $2.43 a gallon. Natural gas for June delivery rose 8 cents, or 2%, to $4 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. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for May delivery closed higher by Rs 46 (1.2%) at Rs 3,860/barrel. Natural gas for May delivery closed at Rs 178.9, higher by Rs 2.9 (1.6%)