Crude prices erase earlier gains

Prices drop due to weak economic data and strong dollar

Crude oil prices slipped on Tuesday, 22 June 2010 at Nymex. Prices fell due to the steady dollar and weaker than expected housing sector report.



On Tuesday, crude-oil futures for light sweet crude for August delivery closed at $77.85/barrel (lower by $0.76 or 0.96%). During intra day trading, prices rose to a high of $78.95 and also fell to a low of $77.79. Last week, prices gained 4.6%.

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 8.6%.

Latest report at Wall Street showed that existing-home sales registered an unexpected 2.2% decline in May against an expected rise around 6%, on the thought that buyers would rush to take advantage of a tax break expiring this month. This shook investor confidence a bit today once again.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.3%.

On Tuesday, natural gas for July delivery shed 26 cents, or 4.6%, to $4.6 per million British thermal units.

Also on Tuesday, heating oil for July delivery shed 58 cents, or 0.3%, to $2.09 a gallon. July gasoline lost $0.01 (0.5%) to $2.12 a gallon.

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 July delivery closed higher by Rs 18 (0.52%) at Rs 3,613/barrel. Natural gas for June delivery closed at Rs 217.2, lower by Rs 6.2 (2.8%).