Crude registers marginal drop

Global economic health concerns push prices lower

Crude oil prices ended little lower on Monday, 07 June 2010. Concerns regarding global economic health pushed prices lower.

On Monday, crude-oil futures for light sweet crude for July delivery closed at $71.4/barrel (lower by $0.07 or 0.1%). 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 1.7%.

In the currency market on Monday, the dollar stayed strong for almost the entire day and the dollar index ended the day with a 0.3% gain.

Among economic reports for the day, it was shown that consumer credit increased by $1 billion in April. That made for a sharp upturn from the downwardly revised $5.4 billion decline in consumer credit for the prior month.

Market participants continued to sell stocks even today after officials from Hungary last week stated that economic conditions in their country are grave and that the country might be the next one in defaulting on its debt. In addition, the country does not plan to put austerity measures in place, leading many wonder whether the European Union will have to provide a bailout.

Among other energy products, reformulated gasoline for July delivery lost 2 cents to finish at $1.99 a gallon.

Natural gas for July delivery added 12 cents, or 2.5%, to settle at $4.91 per million British thermal units. Natural-gas prices rose 10% last week, their best performance since a 12% increase in December 2009.

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 higher by Rs 35 (1.04%) at Rs 3,399/barrel. Natural gas for June delivery closed at Rs 229.1, lower by Rs 0.6 (0.3%).