Crude back with little gains

Prices rose due to the weak dollar

Crude oil prices ended modestly higher on Tuesday, 08 June 2010 at Nymex. Prices rose due to the weak dollar.

On Tuesday, crude-oil futures for light sweet crude for July delivery closed at $71.99/barrel (higher by $0.55 or 0.8%). Last week, prices shed 3.3%. However, the contract seemed to stabilize after last week's sharp decline in the wake of a lackluster U.S. jobs report and renewed European debt concerns.

For the month of May, crude shed 14%. It was the biggest monthly drop for crude since December 2008. 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 2.5%.



In the currency market on Tuesday, the euro was able to rebound and net a gain of roughly 0.3% at $1.196 after oscillating for most of the session. The dollar index, which weighs the strength of dollar against a basket of six other currencies, fell marginally today.

On Tuesday, the Department of Energy's Energy Information Administration released its monthly energy outlook report, which lowered government oil price projections for the second half of the year. The EIA said prices are likely to average $79 a barrel in the second half of 2010, from expectations of $84 a barrel in last month's report.

U.S. stocks traded in a choppy pattern Tuesday, initially drawing support from comments made late Monday by Federal Reserve chief Ben Bernanke before gains faded into losses. Bernanke said he didn't expect to see a double-dip recession in the U.S. That was tempered, however, by more concerns about Europe's economic health as Fitch Ratings warned that the U.K. faces enormous budget problems. But US stocks managed to recover at the end.

July natural gas futures shed 2.3% to finish at $4.803 per MMBtu on profit taking from its recent rally back towards the $5 mark.

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 June delivery closed lower by Rs 24 (0.7%) at Rs 3,375/barrel. Natural gas for June delivery closed at Rs 226.4, lower by Rs 2.7 (1.2%).